Regional  Oral  History  Office  University  of  California 

The  Bancroft  Library  Berkeley,  California 


Pillsbury,  Madison  &  Sutro  Oral  History  Series 


Turner  H.  McBaine 
A  CAREER  IN  THE  LAW  AT  HOME  AND  ABROAD 


With  an  Introduction  by 
Charles  B.  Renfrew 


An  Interview  Conducted  By 
Carole  Hicke 
1986 


Copyright  (c)    1989  by  The  Regents  of  the  University  of  California 


Since  1954  the  Regional  Oral  History  Office  has  been  interviewing 
leading  participants  in  or  well-placed  witnesses  to  major  events  in  the 
development  of  Northern  California,  the  West,  and  the  nation.   Oral  his 
tory  is  a  modern  research  technique  involving  an  interviewee  and  an 
informed  interviewer  in  spontaneous  conversation.   The  taped  record  is 
transcribed,  lightly  edited  for  continuity  and  clarity,  and  reviewed  by 
the  interviewee.  The  resulting  manuscript  is  typed  in  final  form, 
indexed,  bound  with  photographs  and  illustrative  materials,  and  placed 
in  The  Bancroft  Library  at  the  University  of  California,  Berkeley,  and 
other  research  collections  for  scholarly  use.   Because  it  is  primary 
material,  oral  history  is  not  intended  to  present  the  final,  verified, 
or  complete  narrative  of  events.   It  is  a  spoken  account,  offered  by  the 
interviewee  in  response  to  questioning,  and  as  such  it  is  reflective, 
partisan,  deeply  involved,  and  irreplaceable. 

**************** 

All  uses  of  this  manuscript  are  covered  by  a  legal  agreement 
between  the  University  of  California  and  Turner  H.  McBaine  dated 
October  30,  1986.  The  manuscript  is  thereby  made  available  for  research 
purposes.   All  literary  rights  in  the  manuscript,  including  the  right  to 
publish,  are  reserved  to  The  Bancroft  Library  of  the  University  of 
California,  Berkeley.   No  part  of  the  manuscript  may  be  quoted  for  pub 
lication  without  the  written  permission  of  the  Director  of  The  Bancroft 
Library  of  the  University  of  California,  Berkeley. 

Requests  for  permission  to  quote  for  publication  should  be 
addressed  to  the  Regional  Oral  History  Office,  486  Library,  and  should 
include  identification  of  the  specific  passages  to  be  quoted,  antici 
pated  use  of  the  passages,  and  identification  of  the  user.   The  legal 
agreement  with  Turner  H.  McBaine  requires  that  he  be  notified  of  the 
request  and  allowed  thirty  days  in  which  to  respond. 

It  is  recommended  that  this  oral  history  be  cited  as  follows: 

Turner  H.  McBaine,  "A  Career  in  the  Law  at  Home  and 
Abroad,"  an  oral  history  conducted  1986  by  Carole  Hicke, 
Regional  Oral  History  Office,  The  Bancroft  Library,  Univer 
sity  of  California,  Berkeley,  1989. 


Copy  No. 


TURNER  H.  McBAINE 
ca.  1955 


Photograph  by  Hartsook 


SAN  FRANCISCO  CHRONICLE 
June  13,    1992 


TURNER  McBAINE 

Specialty  was  oil  and  gas  law 

Turner  McBaine 
—  Counsel  for 
Standard  Oil 

Turner  McBaine,  a  San  Fran 
cisco  corporate  lawyer  for  nearly 
three  decades  who  also  served  as 
general  counsel  for  Standard 
Oil,  died  Thursday  of  pneumonia 
at  the  age  of  81. 

Mr.  McBaine  went  to  work  in 
1948  for  the  law  firm  of  Pillsbury, 
Madison  &  Sutro,  one  of  Califor 
nia's  largest  firms,  and  in  1971  be 
came  its  senior  partner.  He  was 
general  counsel  for  Standard  Oil 
of  California,  which  later  became 
Chevron. 

He  retired  in  1976. 

The  son  of  a  Berkeley  law  pro 
fessor,  Mr.  McBaine  was  born  May 
5, 1911,  in  Columbia,  Mo.,  and  came 
to  California  with  his  family  in  his 
youth. 

He  graduated  Phi  Beta  Kappa 
from  the  University  of  California 
at  Berkeley  in  1932.  He  was  a 
Rhodes  Scholar  at  Oxford  Univer 
sity  in  England  and  received  his 
law  degree  from  Boalt  Hall  in  1936. 

He  was  admitted  to  the  Califor 
nia  Bar  that  year  and  to  the  New 
York  Bar  in  1947.  He  worked  for  a 
San  Francisco  firm  before  World 
War  II. 


He  served  in  the  U.S.  Navy 
from  1941  until  1945,  rising  to  the 
rank  of  lieutenant  commander.  He 
was  decorated  with  the  Legion  of 
Merit  and  the  Order  of  the  British 
Empire. 

During  the  war,  he  served  as 
personal  assistant  to  William  J. 
Donovan,  head  of  the  Office  of 
Strategic  Services,  and  served  in 
Egypt  and  in  Asia. 

Afterward,  he  practiced  law  in 
New  York,  then  returned  to  San 
Francisco  in  1948. 

He  was  named  general  counsel 
~for  Standard  Oil  in  1970. 

His  specialty  was  oil  and  gas 
law:  He  represented  Standard  in 
major  cases  involving  the  Elk  Hills 
oil  reserve  in  California  and  in 
Louisiana.  After  his  retirement,  he 
became  active  in  issues  of  constitu 
tional  law  relating  to  memberships 
in  private  clubs. 

He  was  trustee  for  the  World 
Affairs  Council  of  Northern  Cali 
fornia  from  1948  to  1954,  a  trustee 
founder  of  the  Asia  Foundation  be 
ginning  in  1954  and  a  member  of 
the  Pacific  Union  Club  and  the 
Burlingame  Country  Club. 

He  lived  in  Hillsborough. 

He  is  survived  by  his  wife, 
Edith  Zsofia;  two  sons,  John  Ney- 
lan  of  New  York  and  James  Patter 
son  McBaine  of  San  Francisco;  and 
four  grandchildren. 

Services  are  pending. 


MCBAINE,  TURNER  H.  (1911-    )  Litigator  and  Corporate  Lawyer 

A  Career  in  the  Law  at  Home  and  Abroad,  1989,  vii,  220  pp. 

Early  practice  in  1930's,  New  York  and  San  Francisco;  Elk  Hills  litigation; 
Civil  Air  Transport  Case,  1948,  involving  Chiang  Kai-Shek;  formation  of 
Iranian  Consortium  to  produce  oil,  1954;  other  clients  and  cases:   Caltex, 
Safeway,  Henry  Miller  estate,  F-310,  FTC  v.  Exxon ;  general  counsel,  Standard 
Oil  of  California,  PM&S  Senior  Partner  1971-1976;  law  firm  management. 

Introduction  by  Charles  B.  Renfrew,  Chevron  Corporation 
Interviewed  in  1986  by  Carole  Hicke 


ILLUSTRATIONS 


Turner  H.  McBaine  [Following  title  page] 

Turner  H.  McBaine  in  Uniform,  1942 52a 

Turner  H .  McBaine  and  Sam  Wright  at  PM&S ,  1955 70a 

McBaine  during  interview  in  his  PM&S  office ,  1986 70a 

Leaving  Teheran ,  1954 92a 


Pillsbury,  Madison  &  Sutro  Oral  History  Series 


Charles  F.  Prael,  Litigation  and  the  Practice  of  Labor  Law  at  Pillsbury, 
Madison  &  Sutro:   1934-1977.  1986. 

John  A.  Sutro,  Sr.,  A  Life  in  the  Law.  1986. 

Albert  J.  Brown,  Building  the  Corporate-Securities  Practice  at  Pillsbury, 
Madison  &  Sutro:   1942-1987.  1988. 

John  B.  Bates,  Litigation  and  Law  Firm  Management  at  Pillsbury,  Madison  & 
Sutro:  1947-1987,  1988. 

Francis  N.  Marshall,  Looking  Back:   A  Lifetime  Among  Courts ,  Commissions ,  and 
PM&S  Lawyers ,  1988. 

Harry  R.  Horrow,  A  Career  in  the  Practice  of  Tax  Law  at  Pillsbury,  Madison  & 
Sutro,  1988. 

Noel  J.  Dyer,  Lawyer  for  the  Defense:   Forty  Years  Before  California  Courts 
and  Commissions ,  1988. 

Turner  H.  McBaine,  A  Career  in  the  Law  <it  Home  and  Abroad,  1989. 

Wallace  L.  Kaapcke,  "General  Civil  Practice"  -  A  Varied  and  Exciting  Life  at 
Pillsbury,  Madison  &  Sutro,  1989.   In  Progress 

Francis  R.  Kirkham.   In  Progress 
James  E.  O'Brien.   In  Progress 
Frank  H.  Roberts.   In  Progress 


TABLE  OF  CONTENTS 

PREFACE  by  George  A.  Sears   i 

INTRODUCTION  by  Charles  B.  Renfrew   ii 

INTERVIEW  HISTORY  V 

BRIEF  BIOGRAPHY vii 

I   BACKGROUND:   FAMILY  HISTORY  AND  EARLY  LIFE  1 

Family  1 

Growing  Up  in  Missouri 5 

Education  in  California   9 

Oxford  University   22 

Law  School  at  Boalt  Hall 32 

II   EARLY  PROFESSIONAL  EXPERIENCE   40 

Orrick,  Palmer  &  Dahlquist  40 

Working  With  John  Francis  Neylan 42 

World  War  II  Years 46 

III   POSTWAR  YEARS:   FIRST  NEW  YORK,  THEN  PM&S 60 

New  York 60 

Joining  PM&S 62 

Early  Partners  and  Expansion  of  the  Firm 65 

IV  MAJOR  RESPONSIBILITIES  72 

Elk  Hills 72 

Reporting  to  Senior  Firm  Members  78 

Civil  Air  Transport  Case 80 

Iranian  Consortium  85 

Caltex 98 

The  Safeway  Case 107 

Buras  y.  U.S.  and  Chevron Ill 

Henry  Miller  Estate  Litigation  114 

The  F-310  Case 120 

FTC  y.  Exxon 127 

General  Counsel  Socal 138 

V  SENIOR  PARTNER  OF  PM&S,  1971-1976:   FIRM  ADMINISTRATION   143 

Growth  of  Committee  System  143 

The  Management  Committee  144 

The  Employment  Committee  147 

The  Library  Committee   159 

Growth  of  the  Firm  in  the  1970s 163 

Computers 166 

Financial  and  Business  Procedures   172 


VI  OVERVIEW  OF  PM&S 174 

Characteristics  of  the  Firm 174 

Intel's  Public  Offering:   An  Aside  178. 

Community  Activities  180 

APPENDIX  A:   Remarks  of  Turner  H.  McBaine,  March  25,  1977 194 

APPENDIX  B:   Speech  to  the  Commonwealth  Club  1955 199 

APPENDIX  C:   Statement  of  the  Facts  in  Buras  Case 212 

TAPE  GUIDE 216 

INDEX  217 


PREFACE 


The  history  of  Pillsbury,  Madison  &  Sutro  extends  more  than  100  years. 
Its  founder,  Evans  S.  Pillsbury,  commenced  the  practice  of  law  in  San 
Francisco  in  1874.   In  the  1890s,  Frank  D.  Madison,  Alfred  Sutro,  and 
Mr.  Pillsbury 's  son,  Horace,  were  employed  as  associates.   In  1905,  they  and 
Oscar  Sutro  became  his  partners  under  the  firm  name  Pillsbury,  Madison  & 
Sutro. 

In  serving  thousands  of  corporate  and  individual  clients  over  the  years, 
the  firm  helped  to  write  much  California  history.   It  played  a  leading  role  in 
landmark  litigation  in  the  Supreme  Court  of  California  and  other  courts.   In 
its  offices,  a  number  of  California's  largest  corporations  were  incorporated 
and  legal  arrangements  for  numerous  major  transactions  were  developed.   In 
addition  to  its  services  to  business  and  other  clients,  the  firm  has  a  promi 
nent  record  of  services  to  the  legal  profession  and  to  the  community, 
charitable,  and  other  endeavors. 

In  March  1985,  with  the  firm  approaching  400  attorneys  situated  in  mul 
tiple  offices,  the  Management  Committee  approved  the  funding  of  an  oral  his 
tory  project  to  be  conducted  by  the  Regional  Oral  History  Office  of  The 
Bancroft  Library  of  the  University  of  California,  Berkeley.   The  purpose  of 
the  project  is  to  supplement  documents  of  historical  interest  and  earlier 
statements  about  the  firm's  history  with  the  recorded  memories  of  those  who 
have  helped  build  the  firm  during  the  past  fifty  years.   It  is  our  hope  that 
the  project  will  preserve  and  enhance  the  traditional  collegiality,  respect, 
and  affection  among  the  members  of  the  firm. 


George  A.  Sears 

Chairman  of  the  Management  Committee 


May  1986 


ii 


. 
INTRODUCTION  by  Charles  B.  Renfrew 

TURNER  HUDSON  MCBAINE 

"I  do  not  distinguish  by  the  eye,  but  by  the  mind, 
which  is  the  proper  judge  of  the  man." 

Seneca 


It  is  by  the  mind  that  Turner  Hudson  McBaine  will  be  judged,  it  is  by  the 
mind  that  he  has  made  his  mark,  at  school,  in  military  intelligence,  in  the 
practice  of  law  and  in  his  dealings  with  others.   For  Turner,  Homo  sapiens  is 
not  only  correct  generically,  but  is  also  apt  and  descriptive  personally.   He 
is  the  quintessence  of  a  wise  man.   Turner's  extraordinary  rationale  powers, 
coupled  with  an  unusual  persuasive  ability  and  an  easy  charm,  make  him  a 
fearsome  negotiator  and  a  formidable  advocate. 

Like  all  of  us,  Turner  is  a  product  of  a  number  of  influences  and  experi 
ences,  several  of  which  I  believe  deserve  some  emphasis:   His  childhood  in 
Missouri,  the  undergraduate  years  at  Berkeley,  study  at  Oxford,  and  his  work 
with  the  Office  of  Strategic  Services  during  World  War  II. 

His  early  childhood  and  youth  were  spent  in  a  small  town  in  Missouri. 
There  he  grew  up,  the  constant  companion  of  a  former  slave  who  introduced 
Turner  to  hunting,  fishing,  and  the  art  of  story  telling.   Although  Uncle 
Scott  was  illiterate,  he,  too,  was  a  wise  man  and  a  teacher  of  value  and  tra 
ditions  that  made  profound  impressions  on  Turner.   It  was  here  that  he  learned 
self-reliance  and  confidence  and  where  he  gained  his  sense  of  identity  and 
assurance.   This  small  town  was  also  the  home  of  several  educational  institu 
tions,  including  the  University  of  Missouri,  whose  president  lived  across  the 
street  from  the  McBaines  and  was  a  close  family  friend.   It  was  in  Columbia, 
Missouri  that  Turner  was  exposed  to  and  lived  with  those  who  worked  with  their 
minds.   His  father,  a  distinguished  professor  of  law,  was  also  dean  of  the  law 
school,  a  private  practitioner  and,  upon  occasion,  a  special  judge  on  the 
Missouri  Supreme  Court.   It  was  with  his  father  that  Turner  learned  to  discuss 
issues,  debating  points  based  upon  facts  and  reasoning  without  impairing  or 
affecting  the  relationship  of  those  engaged  in  the  process. 

His  early  exposure  and  adaptation  to  the  world  of  intellect  prepared  him 
well  for  the  University  of  California  at  Berkeley.   There  he  grew  and  flour 
ished  in  the  early  years  of  the  legendary  president  of  the  University,  Robert 
Gordon  Sproul.   These  were  four  incredible  years  in  which  Turner,  knowing  all 
of  his  professors,  as  well  as  almost  everyone  in  the  administration,  took 
advantage  of  the  rich  variety  of  courses  and  activities  which  were  offered. 
He  was  challenged  and  he  responded.   He  was  salutatorian  of  his  class  of  1932, 
on  the  student  council,  senior  track  manager,  commanding  officer  of  the  Naval 
ROTC  and,  surprisingly,  found  time  to  be  a  member  of  two  drinking 
fraternities . 


iii 

Winning  a  Rhodes  scholarship  was  the  culmination  of  a  brilliant 
undergraduate  career.  The  years  that  Turner  spent  at  Oxford  had  an  obvious 
influence  on  his  later  life.   It  was  there  he  developed  his  dedication  to 
legal  scholarship  and  the  principles  of  Anglo-Saxon  jurisprudence.  The  last, 
and  a  most  significant  factor,  were  the  years  Turner  spent  with  the  Office  of 
Strategic  Services  (OSS)  during  World  War  II,  first  as  an  assistant  to  Wild 
Bill  Donovan  and  then  in  the  Middle  East  Theater  where  he  was  awarded  the 
Order  of  the  British  Empire  and  the  Legion  of  Merit  for  his  distinguished  ser 
vice.  Here  self-reliance  and  discipline  were  essential  and  Turner's  were 
reinforced.  To  this  day,  I  cannot  imagine  Turner  parachuting  out  of  an 
airplane;  yet  he  did  it. 

Turner's  experiences  seemed  to  build  upon  each  other  in  that  one  prepared 
him  for  the  next.   For  example,  his  years  at  Oxford  enabled  him  to  better  work 
with  his  English  counterparts  in  the  Middle  East  Theater  in  the  Second  World 
War  which,  in  turn,  helped  him  during  the  arduous  negotiations  with  the  repre 
sentatives  of  the  Anglo-Iranian  Company,  which  led  to  the  Iranian  Consortium. 
The  relations  that  he  developed  with  the  legal  representative  of  Texaco  at  the 
Iranian  Consortium  became  exceedingly  valuable  in  subsequently  negotiating  the 
dissolution  of  CalTex  Europe  with  the  president  of  Texaco,  who  was  the  former 
legal  representative  during  the  Iranian  Consortium  negotiations. 

Although  attracted  by  the  East  Coast  --  Turner  at  one  point  contemplated 
going  to  Harvard  Law  School  and  did,  in  fact,  practice  in  New  York  City  for 
two  years  --  he  was  ultimately  drawn  back  to  the  West.  While  he  was  comfor 
table  in  Europe,  the  Middle  East,  or  on  the  Eastern  seaboard,  it  was  in  the 
West  that  he  was  home. 

He  would  have  been  one  of  the  country's  outstanding  trial  lawyers  but  for 
the  untimely  death  of  Felix  T.  Smith,  then  the  senior  partner  of  Pillsbury, 
Madison  &  Sutro  and  general  counsel  of  the  Standard  Oil  Company  of  California. 
Turner  was  reassigned  from  trial  practice  to  work  with  Marshall  Madison,  Felix 
Smith's  successor  as  general  counsel  to  the  Standard  Oil  Company  of  California 
and  as  the  senior  partner  of  Pillsbury,  Madison  &  Sutro,  two  positions  which 
Turner  himself  ultimately  assumed.   Although  the  demands  of  his  practice  pre 
cluded  him  from  full  time  courtroom  work,  Turner,  throughout  his  career,  even 
while  general  counsel  of  the  Standard  Oil  Company  of  California,  handled  major 
pieces  of  litigation,  some  involving  Standard,  such  as  Buras ,  F-310  and  FTC  v. 
Exxon ,  others  for  different  clients,  Civil  Air  Transport  case,  Koster  v. 
Lingan  Warren  and  the  Henry  Miller  Estate  litigation.   Turner  was  drawn  to 
these  cases.   It  was  here  that  he  could  devote  himself  to  a  single  project, 
concentrating  his  talents  and  focusing  his  efforts  on  an  intricately  complex 
matter  where  relentless  application  of  logic  and  rapid  assimilation  of  facts 
permitted  him  to  work  his  way  through  a  labyrinth  of  facts  and  theories  and 
concepts  to  ultimately  come  to  a  rational  conclusion.   His  was  a  disciplined, 
highly  cultivated  mind,  passionately  devoted  to  the  law  as  developed  in  Anglo- 
American  constitutional  history.   His  legal  work,  like  his  tailoring,  was 
impeccable:   handcrafted  from  the  finest  materials,  carefully  put  together  in 
as  enduring  form  as  possible  with  nothing  overstated. 

Turner  s  courtroom  style  was  also  proper,  perhaps  more  formal  than  many 
of  today's  advocates.   His  trial  preparation  and  presentation  represented 
countless  hours  on  his  part  and  those  of  his  associates.   His  powers  of  con- 


iv 

centration  were  remarkable,  as  well  as  the  physical  stamina  which  permitted 
him  to  work  with  an  artist's  intensity.  Although  capable  of  prodigious 
efforts,  he  never  worked  for  work's  sake,  but  only  for  the  result  it  produced. 
Despite  the  demands  of  the  responsibilities  of  being  general  counsel  to  an 
international  oil  company,  he  still  found  time  to  have  initiated  or  been  one 
of  those  primarily  responsible  for  many  of  the  innovations  that  Pillsbury 
adopted  in  the  administrative  side  of  the  practice  of  a  major  national  law 
firm.   Mandatory  retirement  and  the  phasing  out  of  the  practice,  the  maximum 
use  of  Keough,  evolution  of  the  Library  Committee,  the  Employment  Committee, 
the  Management  Committee  and  the  use  of  computers  all  were  the  result  of  his 
efforts . 

There  is  one  slight  caveat  --  this  oral  history  understandably  deals 
almost  exclusively  with  Turner's  professional  career.   It  does  not  speak, 
except  indirectly,  of  his  family  or  personal  life.   This  is  not  to  say  that  it 
is  deficient  because  of  these  voids,  because  it  accurately  reflects  Turner  s 
total  commitment  to  the  practice  of  law. 

Advocate,  counselor,  negotiator,  scholar,  and  trusted  friend:   like  all 
great  practitioners,  a  superb  teacher.   Because  of  the  pressures  of  speciali 
zation,  we  may  never  see  another  like  him. 

Charles  B.  Renfrew 

Director  and  Vice  President  for 

Legal  Affairs,  Chevron  Corporation 

March  1989 


INTERVIEW  HISTORY 

Turner  H.  McBaine  was  interviewed  as  part  of  the  series  of  oral  histories 
being  done  with  twelve  advisory  partners  at  Pillsbury,  Madison  &  Sutro. 

Mr.  McBaine  was  an  active  member  of  the  firm  for  thirty  years,  from  1947 
to  1977,  when  he  became  an  advisory  partner.   In  this  oral  history  he  begins 
with  some  interesting  stories  of  his  youth  and  education.   He  graduated  from 
the  University  of  California,  Berkeley;  studied  at  Oxford  as  a  Rhodes  Scholar, 
where  he  obtained  a  B.A.  in  Jurisprudence,  and  received  a  law  degree  from 
Boalt  Hall  in  1936.   While  at  Boalt,  as  he  recalls,  he  took  a  course  in  Evi 
dence  from  his  respected  and  popular  father,  Professor  James  P.  McBaine,  and 
sat  in  the  first  row.   "l  enjoyed  debating  with  him  about  legal  points,  so  I 
sort  of  waded  in  and  had  a  thoroughly  good  time." 

He  began  practicing  law  in  1936,  but  as  a  member  of  the  U.S.  Naval 
Reserve,  McBaine  was  called  to  active  duty  in  1941.   His  wartime  service  with 
"Wild  Bill"  Donovan  in  the  office  of  Strategic  Services  brought  him  valuable 
experience  in  Washington,  B.C.,  the  Middle  East,  and  the  Far  East.   After  the 
war  he  practiced  law  in  New  York  for  two  years,  then  joined  Pillsbury, 
Madison  &  Sutro  in  San  Francisco,  becoming  a  partner  in  1950. 

His  law  practice,  like  his  war  service,  carried  him  around  the  world.   On 
behalf  of  General  Claire  Chennault,  head  of  the  World  War  II  Flying  Tigers, 
McBaine  cleared  the  title  to  airline  assets  sold  to  Chennault  by  Chiang  Kai- 
shek  but  claimed  by  the  mainland  Chinese  Communist  government.   McBaine  par 
ticipated  in  the  1953  negotiations  with  Iran  allowing  a  consortium  of  Western 
oil  companies  to  produce  Iranian  oil.   He  argued  cases  in  Louisiana,  where 
state  law  is  based  not  on  English  common  law  but  on  the  Napoleonic  Code. 

Pursuing  a  historical  viewpoint  in  his  oral  history,  McBaine  discusses 
the  evolution  of  both  firm  management  practices  and  the  committee  system.   He 
notes  the  changes  in  hiring  practices  --  he  was  chairman  of  the  Employment 
Committee  for  a  time  --as  they  evolved  over  the  years.   He  traces  the  growth 
of  the  library  from  the  time  the  firm  had  no  official  librarian  to  the  present 
modern  library  in  its  spacious  and  elegant  quarters  on  the  20th  floor  of  the 
Chevron  Building  at  225  Bush  Street.   And  he  deals  specifically  with  some  of 
the  problems  faced  by  the  firm's  Management  Committee.   Speaking  of  decision- 
making,  McBaine  recalls,  "[As  senior  partner]  I  was  simply  the  accumulator. 
What  I  did  was  reach,  as  nearly  as  possible,  a  consensus.  .  .   Unless  I  could 
command  the  support  of  a  substantial  majority  of  the  other  seniors  in  the 
firm,  I  never  tried  to  act." 

As  general  counsel  for  Standard  Oil  Company  of  California  1970-1976, 
McBaine  saw  the  oil  company  through  a  morass  of  Congressional  hearings  and 
major  antitrust  cases. 

At  the  same  time,  McBaine  was  senior  partner  for  the  firm,  overseeing  the 
enormous  growth  of  the  1970s,  the  arrival  of  the  computer  age,  and  changes  in 


vi 

financial  and  management  procedures.   Retiring  in  1977,  he  left  a  legacy  of 
steady  progress  and  a  strong  commitment  to  excellence. 

For  this  oral  history,  eight  tape-recorded  interview  sessions  took  place 
in  Mr.  McBaine's  ninth  floor  office  in  the  Adam  Grant  Building,  located  in  San 
Francisco's  financial  district.   Pictures  of  his  family  and  of  colleagues  hang 
on  the  walls,  along  with  a  Persian- framed  photo  of  the  negotiations  at  work  in 
Iran.   Books  and  briefs  line  the  bookshelves. 

The  interviews  took  place  on  April  16  and  29,  June  19  and  26,  July  3,  17, 
and  28,  and  August  6,  1986.   After  the  tapes  were  transcribed,  Mr.  McBaine 
corrected  the  edited  transcript  and  selected  photographs  and  illustrations. 


Carole  Hicke 
Project  Director 


February  1989 

Regional  Oral  History  Office 
486  The  Bancroft  Library 
University  of  California,  Berkeley 


Regional  Oral  History  Office 
Room  486  The  Bancroft  Library 


University  of  California 
Berkeley,  California  94720 


BIOGRAPHICAL  INFORMATION 


Your  full  name 
Date  of  birth 

Father's  full  name 
Occupation 

Mother's  full  name 
Occupation 


Family 


Spouse  /. 


Where  did  you  grow  up? 
Education 


Areas  of  expertise 


Special  interests  or  activities 


*^/?> 


£ns^  <^S  <*L 


u 


MCBAINE,  TURNER  HUDSON,  lawyer;  b.  Columbia,  Mo.,  Mty 
5,  191 1;  s.  James  Patterson  and  Ethel  (Hudson)  McB.;  A.B.,  U.  Calif, 
at  Berkeley,  1932;  L.L.B.,  1936;  B.A.  in  Jurisprudence  (Rhodes 
scholar),  Oxford  (Eng.)  U.,  1934;  m.  Jane  Neylan,  Aug.  2, 1939  (div. 
1957);  children— John  Neylan,  James  Patterson;  m.  2d,  Edith  Zsofia 
Bokor,  Aug.  30,  1957.  Admitted  to  Calif,  bar,  1936,  N.Y.  bar,  1947; 
asso.  firm  Orrick,  Palmer  &  Dahlquist,  San  Francisco,  1936-39,  Cahill, 
Gordon,  Zachery  &  Reindel,  N.Y.C.,  1946-47;  with  firm  Pillsbury, 
Madison  &  Sutro,  San  Francisco,  1948—,  partner,  1950 — ,  sr.  partner, 
1971-77;  gen.  counsel  Standard  Oil  Co.  of  Calif.,  1970-77.  Bd.  visitors 
Stanford  Law  Sch.,  1966-69;  trustee  World  Affairs  Council  No.  Calif., 
1948-54;  trustee  Asia  Found.,  1954—;  bd.  dm.  Bay  Area  Council, 
1977—.  Served  to  comdr.  USNR,  1941-45.  Decorated  Legion  of 
Merit;  Order  Brit  Empire.  Fellow  Am.  Bar  Found.;  mem.  Am.,  Calif?? 
San  Francisco  bar  assns.,  Am.  Judicature  Soc.,  Adminstrv.  Conf.  U.S., 
Calif.  State  Club  Assn.  (pres.  1976—),  Phi  Beta  Kappa,  Order  of  Coif, 
Beta  Theta  Pi.  Republican.  Episcopalian.  Gubs:  Commonwealth, 
Pacific-Union  (San  Francisco);  Burlingame  Country  (Hillsborough). 
Home:  1765  Crockett  Ln  Hillsborough  CA  94010  Office:  225  Bush  St 
San  Francisco  CA  94104 


—   Who's  Who,    1978-79 


I  BACKGROUND:   FAMILY  HISTORY  AND  EARLY  LIFE 
[Date  of  Interview:   April  16,  1986 ]##* 

Family 


Hicke: 


McBaine: 


Hicke: 


I  wonder  if  we  could  start  this  afternoon,  Mr.  McBaine,  by  you 
telling  me  a  little  bit  about  your  background,  about  your  grandpa 
rents  and  parents. 

I  was  born  in  Columbia,  Missouri  on  May  5,  1911.   I  don't  remember 
my  paternal  grandparents,  because  they  were  both  dead  when  I  was 
born.   I  have  no  memory  of  either  one  of  them.   My  grandfather 
McBaine  was  born  in  Missouri.   He  was  a  farmer  and  a  banker.   He  was 
president  of  one  of  the  principal  banks  in  Columbia,  Missouri,  where 
I  was  born,  and  I  have  as  a  memento  a  ten  or  twenty  dollar  bill 
signed  by  him  as  president  of  the  bank;  banks  in  those  days  issued 
their  own  currencies.   And  that's  about  my  only  memento,  other  than 
a  few  pictures  of  him  that  I  have  left. 

My  maternal  grandfather  Hudson  lived  in  Columbia,  in  a  house 
next  door  to  our  house.   It  was  not  quite  like  a  Kennedy  compound, 
but  it  was  a  common  piece  of  property  with  two  houses  there.   My 
maternal  grandfather  was  a  newspaperman  and  the  founder  and  presi 
dent  of  the  telephone  company  in  Columbia.   I  can  well  remember  that 
when  I  was  a  child,  whenever  he  spoke  on  the  telephone,  he  showed 
his  innate  distrust  of  this  new-fangled  instrument  by  yelling  at  the 
absolute  top  of  his  voice.   He  could  be  heard  half  a  mile  away 
without  the  benefit  of  the  telephone,  which  used  to  occasion  a  great 
deal  of  amusement  in  the  family.   But  I  remember  him  well,  and  my 
maternal  grandmother. 

Tell  me  about  the  people  who  have  influenced  you  the  most. 


*     This  symbol,  ##,  indicates  a  tape  interruption  or  the  begin 
ning  or  end  of  a  tape  side. 


McBaine: 


Hicke: 
McBaine: 

Hicke: 

McBaine: 


Hicke: 
McBaine: 


Hicke: 
McBaine: 


My  grandfather  Hudson  influenced  me  in  several  ways.   First  of  all, 
there's  my  version  of,  I  guess,  the  George  Washington  cherry  tree 
story.  When  I  was  very  young,  four  or  five,  I  guess,  I  was  given  an 
Indian  tomahawk  for  my  birthday.   One  day  I  was  out  with  my  hatchet  . 
and  some  other  toys,  and  having  nothing  else  to  do,  I  sat  down  by 
the  corner  of  my  grandfather's  house,  which  was  built  out  of  yellow 
brick,  and  began  chopping  away  at  a  brick  in  the  corner  of  the 
house.   By  the  time  I  was  discovered,  I'd  cut  about  a  quarter  of  the 
brick  out  of  the  side  of  the  house. 

In  due  course,  I  arrived  in  audience  before  my  grandfather,  and 
he,  maintaining  his  temper  but  being  very  serious  about  it,  told  me 
that  this  was  his  house  built  to  house  his  family,  and  how  important 
it  was  to  him,  and  that  I  had  damaged  his  house.   Would  I  please 
explain  myself?  Of  course,  I  couldn't  explain  myself.   I  had  just 
had  an  impulse  and  I  hadn't  given  any  thought  as  to  what  I'd  done. 
He  said  well,  it  was  too  bad.   Obviously,  I  should  never  never  do  it 
again,  but  I  must  realize  that  I  had  damaged  his  property,  and  I  had 
to  make  good  to  him.   So  he  fined  me,  I  don't  remember  what  it  was, 
a  dollar  or  two  dollars,  something  like  that.   I  was  old  enough  so 
that  I  had  an  allowance,  which  I  think  was  twenty- five  cents  a  week, 
and  I  had  to  pay  ten  cents  out  of  that  twenty-five  cents  each  week 
for  a  number  of  weeks  after  that.   And  I  can  remember  that  incident 
today  just  as  clearly  as  when  it  happened. 

I  believe  it.  That  was  a  rather  memorable  incident. 

It  was,  indeed,  a  memorable  incident.   You  don't  think  about  those 
things  in  the  course  of  a  life  until  you  get  along  and  begin  to  rem 
inisce,  and  then  you  realize  maybe  it  was  a  significant  happening. 

That  was  a  little  financial  planning  training  also. 

That's  right.  And  a  lesson  not  to  wantonly  destroy  property,  so  I 
never  became  a  graffiti  writer  or  stone  chucker.   As  for  other 
family  members,  there  were  numerous  of  them,  but  I  don't  think  there 
was  anything  unusual  about  them. 

What  about  important  family  traditions? 

I  think  perhaps,  without  expressly  remembering  any  particular  admo 
nitions,  in  looking  back  on  it,  that  education  was  important.  Both 
my  grandparents  were  university  graduates.  Their  fathers,  in  turn, 
had  been  university  graduates,  and  I  don't  know  how  widespread  that 
was  in  the  middle  nineteenth  century. 

You're  talking  about  your  grandfathers? 

I'm  talking  about  my  grandfathers,  yes.   Both  of  them  were  college 
graduates,  and  of  course  my  father  was.   All  of  my  uncles  were  uni 
versity  graduates.  Several  of  them  were  professional  men:   doctors 
and  lawyers.   So  without  giving  it  any  thought  at  the  time,  I  just 
assumed  that's  what  one  did,  and  that's  the  way  I  grew  up. 


As  for  my  own  upbringing,  I  hesitate  to  say  it  was  strict.  My 
mother  was  the  disciplinarian  in  my  family  and  I  think  she  realized, 
thank  goodness,  that  discipline  was  necessary  in  bringing  up  a 
child.   She  did  not  wait  for  my  father  to  come  home  and  administer 
the  discipline;  she  took  the  matters  into  her  own  hands.   And  in 
retrospect,  I  must  have  been  somewhat  mischievous,  because  I  can 
remember  getting  switched  any  number  of  times.   She  used  to  go  to 
the  back  door  and  call  for  one  of  the  old  colored  people  who  worked 
on  our  place,  Uncle  Scott  Foster,  about  whom  I  have  told  you. 

Hicke:    I  would  like  to  get  that  story  on  tape.   We  were  talking  about  oral 
histories  previously  when  you  mentioned  Uncle  Scott. 

McBaine:   Yes,  I  made  the  point  that  you  reminded  me  of  him  because  we  were 
talking  about  oral  history,  and  he  was  an  oral  historian.   Both  my 
grandfathers  had  been  slave  owners  in  Missouri,  and  when  I  was  born 
in  1911,  we  still  had  five  or  six  colored  people  working  on  our 
place  who  had  been  ex-slaves  of  my  grandfathers.   The  most  promi 
nent  of  them  was  an  elderly  colored  man  named  Uncle  Scott. 

Uncle  Scott  was  the  greatest  influence  in  my  young  life, 
because  he  was  a  marvelous,  marvelous  human  being.   He  was  illit 
erate.   If  he  had  been  literate,  if  he  had  been  educated  and 
trained,  he  would  have  been  an  outstanding  man,  given  half  a  chance, 
I'm  sure.   But  he  was  one  of  the  most  outstanding  human  beings  I 
have  ever  known.   I  loved  that  old  man  as  much  as  I've  ever  loved 
another  human  being  in  my  life,  and  he  was  my  constant  companion 
when  I  was  small. 

He  was  in  charge  of  the  outside  of  our  place.   We  had  a  garden 
and  chickens  and  various  kinds  of  fowls  and  grew  our  own  vegetables 
and  all  that  sort  of  thing,  and  he  was  in  charge  of  all  of  that.   I 
was  his  self-appointed  helper.   I  probably  hindered  him  more  than 
helped  him,  but  it  was  a  great  way  to  grow  up. 

Whenever  I  misbehaved,  my  mother  would  go  to  the  back  door  and 
call  for  Uncle  Scott,  and  he  would  profess  not  to  hear  her.   So  it 
would  take  some  minutes  before  she  could  locate  Uncle  Scott.   Fortu 
nately,  most  of  the  time,  her  temper  had  cooled  by  the  time  he 
finally  showed  up.   When  it  hadn't  cooled  sufficiently,  he  was 
directed  to  bring  her  a  switch  off  of  some  tree,  which  he  did,  and 
she  used  to  switch  my  legs.   In  retrospect,  again,  I  can't  remember 
a  single  time  when  I  didn't  deserve  it.   And  it  certainly  did  me  a 
world  of  good,  and  it  didn't  do  me  a  bit  of  harm;  that  may  have 
influenced  my  views  as  to  similar  matters  since  then.   I  think  it 
has . 

Hicke:    Can  you  tell  me  the  story  of  Uncle  Scott  and  the  oral  histories  that 
he  did? 

McBaine:   Sure.   Speaking  of  oral  histories,  as  I  say,  Uncle  Scott  was  illit 
erate.   He  loved  the  comic  strips  in  the  Sunday  papers,  but  that's 
the  only  thing  that  he  read:   no  books  or  papers.   But  he  had  an 


extremely  good  mind.   I  don't  know  just  how  old  he  was,  but 
obviously  he  was  well  along  in  years,  having  fought  in  the  Civil 
War.   He  knew  the  history  of  all  of  the  families  in  Boone  County, 
Missouri,  which  is  where  Columbia  is,  and  he  loved  to  recite  the 
stories  about  prominent  members  or  prominent  incidents  in  the 
county.   And  he  would  embellish  these  stories  and  spin  them  out  as 
he  told  them;  he  was  a  marvelous  storyteller.   He  used  to  regale  me 
and  anyone.  He  loved  to  talk  and  to  visit. 

The  president  of  the  University  of  Missouri  lived  across  the 
street  from  us,  and  whenever  he  had  an  important  visitor  in  town,  he 
would  usually  come  across  the  street  and  ring  the  front  doorbell  of 
our  house,  and  after  being  polite  to  my  mother  or  whoever  was  at 
home,  he  would  immediately  head  out  the  back  door  looking  for  Uncle 
Scott.   And  they  would  have  a  visit  out  in  the  vegetable  garden. 

He  was  a  terrific  character,  an  absolutely  beautiful  human 
being.   He  was  a  great  influence  in  my  life.   He  taught  me  to  hunt, 
he  taught  me  to  shoot,  taught  me  to  fish.   He  and  I  ran  a  mole- 
trapping  enterprise  in  my  grandfather's  house,  and  I  got,  I  think, 
twenty-five  cents  for  every  mole  that  we  would  trap.   Of  course, 
Uncle  Scott  did  all  of  the  trapping,  but  I  presented  the  moles  and 
got  the  money.   I  guess  I  could  say  I  first  learned  about  free 
enterprise  from  him. 

Hicke:    Is  there  anything  about  your  early  education  that  stands  out  in  your 
mind? 

McBaine:   Perhaps  I  should  have  said  at  the  outset  --on  this  outline  you  have 
"where  and  when  born"  --  I  was  born  in  1911  in  Columbia,  Missouri. 
Columbia  was  a  college  town.   It  had  about  25,000  people  in  it,  I 
would  say;  it  also  had  the  University  of  Missouri  and  two  girls' 
colleges:   Stevens  College,  which  still  exists,  and  I  think  is  still 
quite  a  prominent  girls'  school,  and  Christian  College  --  I'm  not 
sure  whether  that  still  exists  --  a  church  school. 

In  any  case,  Missouri  being  a  border  state,  as  it  was,  it  had  a 
large  black  population  out  of  that  25,000.   When  schools  were  in 
session,  the  town  expanded  and  was  about  35,000.   But  at  any  rate, 
it  was,  in  my  opinion,  an  ideal  town  for  any  boy  or  girl  to  be  born 
into,  a  boy  particularly,  because  we  lived  right  on  the  edge  of 
town,  and  if  you  went  out  the  back  door  of  our  house,  beyond  our 
back  yard,  garden,  and  so  forth,  there  was  a  field  and  it  just  went 
on  out  into  the  countryside.   There  was  nothing  out  in  back  of  us, 
so  if  I  wanted  to  go  out  and  shoot  rabbits  or  something,  all  I  had 
to  do  was  go  out  the  back  door  and  walk  about  200  yards  and  I  was 
there. 

At  the  same  time,  with  all  of  the  purity  almost  of  growing  up 
in  a  small  town,  it  was  an  academic  town,  so  there  were  academic 
influences  at  work  all  the  time.   My  father  was  a  lawyer.   He  was  a 
professor  at  the  law  school  and  dean  of  the  law  school  for  most  of 
my  childhood  there.   He  was  also  a  practicing  lawyer,  and  he  was 


also  a  special  judge  of  the  Missouri  Supreme  Court.   So  I  constantly 
was  subject  to  influences  of  that  kind  and  the  people  that  he  knew 
and  met  and  brought  to  the  house  in  that  connection. 

Hicke:    What  was  his  first  name? 

McBaine:   My  father's  name?  James  Patterson.   I  should  also  say  that  tying  us 
further  to  that  area  was  the  fact  that  my  grandfather  McBaine  estab 
lished  a  farm  about  twenty  miles  southeast  of  Columbia  in  the  river 
bottom  land  along  the  Missouri  River.   And  that  grew  in  time,  and 
then  a  railroad  siding  was  run  into  there,  and  silos  were  built. 
When  I  was  little,  it  was  a  small  town  that  had  grown  up  there 
called  McBaine,  Missouri. 

The  odd  thing  is  that  when  my  grandfather  McBaine  died,  my 
grandfather  Hudson  bought  the  place  from  his  estate.   So  when  I  was 
little  it  belonged  to  my  grandfather  Hudson,  but  the  town  was  still 
called  McBaine.   I  think  the  town  has  practically  disappeared  nowa 
days;  I  don't  know  how  they  take  the  grain  and  produce  out  now.   But 
in  any  case,  that  was  a  very  dramatic  place  to  me  when  I  was  little. 

My  grandfather  Hudson  went  in  for  prize  cattle,  and  he  had  some 
tremendous  animals  there.   I  can  remember  once,  when  I  was  very 
little,  I  was  invited,  in  fact  urged,  to  lead  one  of  his  prize  bulls 
there  from  one  place  to  another  by  pulling  him  by  the  ring  in  his 
nose,  and  I  was  not  very  happy  about  the  whole  thing,  because  I  can 
still  remember  the  sensation. 

Hicke:    You  did  it? 

McBaine:   I  did  it,  but  I  wasn't  very  happy  with  it.   I  think  a  rhinoceros 
would  not  have  been  any  more  frightening  to  me  at  that  time. 


Growing  Ug  in  Missouri 


McBaine:   My  early  education  was  in  the  public  schools  in  Columbia,  Missouri. 
As  far  as  I  was  concerned,  I  enjoyed  school  thoroughly.   I  had  a 
marvelous  series  of  teachers,  most  of  them  female  --  at  least  half, 
maybe  a  majority.   I  can  remember  one  very  plainly,  but  I'm  sorry  to 
say  I  can't  remember  her  name.   Of  course,  I  suppose  --  I  know  at 
the  time  I  wasn't  conscious  of  it  --  the  schools  were  segregated, 
and  most  of  the  children  there  were  children  from  families  whose 
mothers  and  fathers,  or  at  least  fathers,  were  university  graduates, 
and  they  were  mostly  educated,  middle-class  people.   So  it  wasn't  a 
wide  spectrum  of  American  society  at  all.   It  was  really  a  pretty 
homogeneous  group,  but  the  standards  were  high,  and  the  work  was 
high,  and  the  behavior  of  the  students  was  high.   It  simply  never 
occurred,  as  far  as  I  know,  to  anybody  to  protest  about  things,  or 
misbehave  in  class,  or  defy  authority;  it  just  wasn't  in  our  experi 
ence.   The  experience  in  life  came  in  the  play  yard  during  recess 


Hicke: 
McBaine: 


time,  as  I  suppose  it  does  in  every  school,  but  I  can  still  remember 
my  first  fight  in  the  schoolyard  grounds.   I  suppose  everybody  goes 
through  that,  virtually  everybody  does,  and  I  think  it  was  extremely 

good  training;  it  was  a  good  influence. 

/ 

I  was  not  a  great  fighter,  although  oddly  enough  later  on,  when 
I  went  to  a  boys  camp  up  in  northern  Michigan,  I  did  box  up  there. 
But  in  any  case,  I  can  still  remember  some  of  the  lessons  in  deport 
ment  from  the  school  playground. 

I  also  went  to  high  school  in  Columbia  for  three  years.   And 
again,  the  high  school  was  pretty  much  as  I  have  described  the  grade 
school,  although  I  think  a  broader  classification  of  people  were 
there,  all  white.   I  think,  looking  back  on  it,  it's  hard  to  judge, 
but  I'm  not  sure  that  the  high  school  was  quite  as  outstanding  as 
the  grade  school  was,  perhaps.   Although  apparently  I  didn't  suffer 
any  by  it  because  I  never  had  any  difficulty  with  any  other  schools 
later  on. 

I  do  know  that  my  family  thought  that  the  athletic  facilities 
were  not  all  they  might  be.   And  in  later  years,  it's  often  caused 
me  wonderment  to  recall  this,  because  I  have  no  idea  whether  it  was 
my  mother  or  my  father  who  had  this  idea,  or  why  they  had  the  idea, 
but  they  felt  that  the  athletic  facilities  were  not  all  they  might 
be.  They  and  some  other  parents  hired  a  student  at  the  University 
of  Missouri,  named  Don  Faurot,  who  was  a  star  football  player  and 
later  became  the  coach  of  the  University  of  Missouri  football  team 
for  many  years,  an  outstanding  coach  --  I  can  still  remember  him 
vividly  --  to  coach  us  in  basketball.   He  also  played  on  the 
Missouri  basketball  team,  basketball  and  football. 

I  took  swimming  and  sports  in  general,  the  result  of  which  is 
that  by  the  time  I'd  got  through,  say,  three  years  of  high  school,  I 
was  proficient,  anyway,  in  a  number  of  different  sports.   I'll  come 
to  that  in  a  minute.   As  a  result  of  taking  these  sports,  I  had  a 
much  better  time  in  California  than  I  might  otherwise  have  had. 

Tell  me  about  some  of  your  early  memorable  experiences. 

It's  hard  to  realize  at  the  time  they're  memorable.   You  have  to 
sort  them  out  and  see  which  ones  you  consider  memorable,  but  there 
were  a  number  of  possible  things.   One  is  I  had  a  grandaunt ,  or 
step-grandaunt,  who  lived  not  too  far  from  us.   She  had  quite  a  big 
house,  and  she  used  to  give  a  big  party,  and  I  believe  it  was  on 
Christmas  day,  a  luncheon.   Somehow  or  another  it  worked  out  that  I 
had  Christmas  at  my  parents'  home,  I  had  Christmas  at  my  grandpa 
rents'  home  next  door,  then  I  had  another  Christmas  at  my  grand- 
aunt  s.   The  latter  was  an  enormous  party.   There  must  have  been 
forty  or  fifty  people  there:   there  were  first  cousins  and  so  forth 
and  so  on.   I  did  have  first  cousins  in  Columbia,  and  any  number  of 
kissing  cousins,"  many  of  whom  were  distant  cousins.   Nobody  knows 
just  exactly  what  grade  the  relationship  is.   In  Columbia  in  those 
days  they  were  referred  to  as  kissing  cousins. 


I  think  that  was  an  influence  in  my  early  youth:   to  see  a  big 
and  cohesive  family.  As  far  as  I  knew  as  a  child,  they  all  got 
along  very  well;  they  were  all  good  friends.   Almost  all  of  them 
were  admirable  people.   I  don't  remember  a  single  black  sheep  in  the 
group,  didn't  know  what  a  black  sheep  was,  I  suppose,  at  the  time. 
I  don't  remember  any.   That's  one  experience. 

I  think  that  my  mother  was  an  experience,  although,  again,  I 
didn't  realize  it.   My  mother  was  a  very  strong  woman,  and  she  did 
not  put  up  with  any  nonsense;  on  the  other  hand,  she  was  loving  and 
caring,  and  I  think  did  as  good  a  job  as  anybody  could  do  bringing 
up  a  young  boy. 

Uncle  Scott,  whom  I've  already  mentioned,  was  an  influence  on 
me,  I'm  absolutely  sure,  because  he  had  one  of  the  sweetest  disposi 
tions  and  biggest  hearts  of  anybody  I  ever  knew,  and  was  loved  by 
everybody.   He  was  one  of  the  most  widely  loved  people  I  have  ever 
known,  received  all  sorts  of  kindnesses  and  affection  from  all  sorts 
of  people. 

Another  man  who  was  a  great  influence  on  me  was  Dr.  Walter  Wil 
liams,  who  was  the  president  of  the  university,  and  the  founder  of 
the  School  of  Journalism  at  Missouri.   I  would  say  those  were  the 
principal  people.   I  can't  stop,  I  guess  on  influences  in  my  early 
life  without  mentioning  Camp  Sosowagaming.   Camp  Sosowagaming  is 
near  Big  Bay,  Michigan,  which  is  on  the  upper  peninsula  in  Michigan 
on  the  shores  of  Lake  Superior.   I  must  have  gone  my  first  year, 
from  Columbia,  possibly  when  I  was  eight  years  old.   Yes,  it  would 
be  when  I  was  around  eight  or  nine. 


McBaine:   Central  Missouri  gets  very  hot  in  the  summertime,  and  it  gets  cold 

in  the  winter.   I  suspect  this  is  one  of  the  reasons  my  family  even 
tually  moved  to  California.   When  I  was  little,  of  course,  that 
didn't  bother  me  any;  I  enjoyed  it. 

But  perhaps  one  of  the  reasons  I  went  to  camp  is  when  I  was  a 
small  child,  I  had  every  childhood  disease  known  to  man:   I  had 
about  three  or  four  different  kinds  of  measles,  whooping  cough,  and 
everything  else.   There  wasn't  a  year  that  went  by  that  I  didn't 
miss  several  weeks  of  school  by  being  home  with  something  or 
another.   So  my  family  sent  me  to  this  camp  in  northern  Michigan. 
The  New  England  area  and  the  area  of  northern  Wisconsin  and  northern 
Michigan  are  the  two  principal  areas  in  the  country  for  boys  and 
girls  camps,  I  think. 

This  camp  was  run  by  a  man  who  was  the  principal  of  a  high 
school  in  Kansas  City,  and  was  absolutely  a  marvelous  place:   quite 
a  big  place;  they  had  perhaps  100,  or  maybe  a  few  more  than  100  boys 
in  the  summer.   It  went  on  for  six  weeks,  then  they  had  two  weeks 
post-season,  and  I  always  stayed  the  extra  two  weeks,  so  I  stayed 
two  months  each  summer  up  there.   They  had  a  tremendous  plant, 


Hicke: 
McBaine: 


dormitories  for  sleeping,  athletic  equipment  of  every  kind.   They 
had  a  lot  of  university  students  and  graduate  students  as  counse 
lors,  with  instruction  in  everything  you  can  think  of:   horseback 
riding,  for  example,  both  eastern  saddle  and  western  saddle,  tennis, 
softball,  all  sorts  of  track  events,  swimming,  lifesaving,  and 
canoeing.  The  day  was  just  packed  with  one  thing  after  another, 
starting  with  reveille  in  the  morning,  when  everybody  had  to  line  up 
along  the  shore  of  Lake  Superior,  and  at  a  given  whistle,  dash  for 
ward  and  dive  into  Lake  Superior,  for  a  morning  bath.   And  I  want  to 
tell  you  that  was  really  cold. 

The  camp  was  also  on  a  little  river  that  flowed  into  Lake  Supe 
rior,  so  all  of  our  swimming  and  canoeing  was  done  on  the  river 
because  the  river  was  not  nearly  as  cold  as  Lake  Superior.   In  any 
case,  as  a  result  of  that,  I  again  not  only  learned  to  have  pleasure 
out  of  an  enormous  number  of  different  athletic  kinds  of  things,  but 
I  learned  how  to  compete,  how  to  lose,  how  to  win.   We  had  boxing, 
incidentally,  and  wrestling.   I  boxed  for  quite  a  few  years  up 
there.   As  a  result  of  going  to  that  summer  camp  I  didn't  spend 
another  day  in  bed  for  any  reason  until  I  had  graduated  from  the 
University  of  California  and  went  to  England  when  I  was  21,  not  one 
single  day. 

I'm  sure  that  was  a  great  influence  on  me,  from  a  health  point 
of  view  if  nothing  else.   Again,  I  learned  a  lesson  out  of  it, 
because  the  proprietor  of  this  camp  --  it  was  a  proprietary  camp;  Pa 
Tuton,  the  owner's  name  was  --  gave  a  bonus  of  a  portion  of  the 
tuition  to  old  boys  who  would  recruit  new  boys  for  the  camp.   After 
a  couple  of  years  there,  I  began  recruiting  other  boys  to  come,  and 
the  last  few  years  that  I  was  up  there,  I  went  free  every  summer;  I 
paid  no  tuition. 

A  salesman  in  the  making,  too. 

Whatever  the  motivation  was,  it  would  appeal  to  any  kid  to  see  if  he 
could  do  that.   My  family  didn't  tell  me  I  had  to,  or  anything  of 
the  kind,  but  I  enjoyed  doing  it,  and  it  gave  me  great  satisfaction 
to  do  it.   I  think  Camp  Sosowagaming  was  the  principal  reason  I 
didn't  want  to  come  to  California  when  my  family  decided  to  come, 
more  than  Missouri  was. 


Hicke: 

McBaine: 

Hicke: 

McBaine: 

Hicke: 


Did  you  have  brothers  and  sisters? 

I  had  one  sister,  she  was  older  than  I,  and  that's  all.   She's  dead 
now,  died  five  years  ago  or  more. 

What  was  her  name? 

Ann. 

Are  we  about  up  to  the  point  where  you  moved  to  California? 


McBaine:   I'm  trying  to  think  of  people  who  influenced  me  the  most.   Obvi 
ously,  my  father  influenced  me,  because  he  attracted  me  to  the  law. 

Hicke:    Did  he  tell  stories  about  the  law? 

McBaine:   No.   My  father,  as  I  told  you  --  I  didn't  realize  it  at  the  time  -- 
but  he  was  an  extremely  busy  man.   I  don't  know  how  he  did  all  the 
things  he  did  do,  in  retrospect.   I  didn't  even  realize  it,  I  think, 
at  the  time.   During  his  last  year  in  Missouri,  he  was  the  dean  of 
the  law  school.   He  was  certainly  one  of  the,  if  not  the  leading 
practicing  lawyer  in  Columbia.   He  was  a  special  judge  in  the 
Missouri  Supreme  Court,  and  he  was  the  president  of  the  Missouri 
State  Bar  Association.   I  don't  know  how  he  did  all  those  things. 
But  at  any  rate,  I  wasn't  conscious  of  his  burning  the  midnight  oil 
and  his  not  coming  home  until  late;  I  don't  remember  that. 

No,  I  think  that  his  influence  on  me  was  his  logic,  his  fair- 
mindedness.   He  and  I  always  loved  to  argue.   We  didn't  always  nec 
essarily  have  the  same  point  of  view,  and  I'm  sure  you've  seen  other 
cases  like  it.   Where  people  are  very  close,  they  can  get  into  some 
good  arguments,  and  people  who  don't  know  them  well  think,  "Oh,  my 
God."  When  my  second  wife  first  met  him,  and  we  would  get  into  dis 
cussions  on  some  legal  issues  or  one  thing  and  another,  she  thought 
we  were  at  one  another's  throats.  We  were  just  having  a  good  time. 

Hicke:    It's  hard  to  have  a  good  discussion  if  you  both  agree  on  everything, 
[laughs] 

McBaine:   That's  right.   And  he  was  an  eminently  reasonable  man.   He  was  con 
servative,  and  oftentimes  that  means  the  child  will  be  something 
else,  but  in  my  case  it  did  not.   I'm  also  conservative.   I  don't 
think  I'm  quite  as  conservative  as  he  was. 

I  can't  really  say  that  I  think  my  grandfather  was  that  much  of 
an  influence  on  me,  because  his  activities  were  strange  to  me.  So  I 
think  that's  about  all  I  could  say  about  influence. 


Education  in  California 


Hicke:    What  about  your  education? 

McBaine:   When  I  finished  my  junior  year  in  high  school  in  Columbia,  my  father 

decided  to  move  to  the  University  of  California  at  Berkeley,  where 

he  was  offered  a  professorship  in  the  School  of  Law  there.   We  came 
to  California  in  1927. 

The  first  thing  I  did  was  go  to  Berkeley  High  School.   Berkeley 
High  School  was  a  big  jump  for  me;  that  is,  it  was  a  big  school  even 
then.   It  did  not  have  the  racial  mixture  it  has  today,  and  this 
leads  to  one  of  the  stories  I'll  tell  you.   But  it  was  still  a  big 


10 

school:   I  don't  know  how  big,  but  two  or  three  thousand  students,  I 
think.   It  was  a  little  overwhelming  to  come  from  the  small  schools 
that  I'd  come  from.   But  again,  I  was  extremely  fortunate.   I  had 
several  excellent  teachers  there  and,  again,  the  most  memorable 
teacher,  by  all  odds,  that  I  had  was  a  woman,  and  I  do  remember  her 
name  very  well.   Her  name  was  Miss  Abbott,  and  she  taught  mathe 
matics.   I  was  a  good  student.   I  didn't  have  much  difficulty  with 
school  work,  so  I  got  along  all  right  with  that,  and  I  was  feeling 
my  way  around. 

I  had  a  couple  of  memorable  experiences.   First  of  all,  my 
first  semester  there,  I  was  assigned  to  a  physical  education  class, 
and  it  was  a  period  for  swimming.   When  I  showed  up  for  the  class 
there  was  one  black  boy  in  the  class.   I  had  been  brought  up  in  a 
strictly  segregated  society,  and  during  my  years  in  Missouri  I  don't 
ever  remember  this  being  discussed;  as  far  as  I  was  concerned,  there 
was  no  problem  about  it,  either  on  the  white  side  or  the  black  side. 
Everybody  was  friends,  and  happy,  and  I  never  was  conscious  of  any 
friction  at  all,  especially  surrounded  by  the  black  people  on  our 
places  who,  as  I  say,  without  exception  were  really  just  outstanding 
human  beings. 

But  I  found  that  I  had  an  emotional  reaction  to  this  thing,  and 
I  didn't  want  to  go  in  the  pool  with  him.   At  least  I  was  smart 
enough  so  that  I  didn't  sound  off  to  anybody  about  that,  but  I  tried 
to  get  my  swimming  period  changed,  take  it  at  some  other  time.   I 
don't  remember  what  excuse  I  made  up  for  it.   It  probably  wasn't 
very  good,  because  the  gym  instructor  declined  to  reassign  me. 

I  remember  I  wound  up  in  the  principal's  office,  and  I  can 
still  remember  him  very  well  from  this  incident.   I  guess  he 
suspected  the  problem,  but  I  wasn't  going  to  admit  that,  so  I  had  a 
big  go-round  with  him.   The  funny  thing  is,  I  can't  remember  now 
whether  I  won  or  lost.   I  don't  remember  whether  I  went  into  the 
pool  with  this  boy  or  not. 

But  the  significant  thing  was  that  either  at  the  time  this  was 
happening  or  so  shortly  thereafter  it  was  almost  contemporaneous,  I 
went  to  the  movies  one  Saturday  afternoon  with  two  of  my  new-found 
California  friends.   It  was  a  bright  summer's  day,  the  sun  was 
shining  full  blast,  so  when  we  went  into  the  theater  --  you  know  how 
it  is  when  your  eyes  are  just  blind,  you  can't  see  anything,  you 
have  to  grope  around  --we  groped  around  for  a  while,  and  finally 
began  to  see  more  clearly. 

We  went  down  the  center  aisle,  and  there  were  three  seats  on 
the  right,  I  can  remember,  and  I  went  in  first,  and  my  two  friends 
came  in  and  sat  on  my  left,  the  outside  one  on  the  aisle.   And  even 
tually  our  eyes  cleared,  and  there  was  nobody  in  front  of  us.   We 
were  in  the  middle  of  the  theater;  the  screen  was  absolutely  unob 
structed.   There  were  a  couple  of  people  sitting  on  my  right,  but  I 
didn't  even  notice  particularly  who  they  were. 


11 

After  a  few  minutes,  the  kid  sitting  next  to  me  punched  me  in 
the  arm  and  said,  "Come  on,  let's  move."  And  I  said,  "Move?  What 
do  you  want  to  move  for?"  He  said,  "Come  on,  let's  move."  I  said, 
"No,  why  move?  These  are  the  best  seats  in  the  house.  What  are  you 
talking  about?"  He  punched  me  again,  and  he  said,  "Japs."  There 
were  two  Japanese  boys  sitting  on  my  right.   I'd  never  seen  a  Japa 
nese  in  Missouri.   They  were  an  unknown  species  to  me,  just  as  I 
would  almost  say  blacks  were  to  these  two  California  boys  sitting  on 
my  left.   And  these  two  kids  wanted  to  get  up  and  move,  even  though 
they  weren't  sitting  next  to  these  two  Japanese  boys. 

Hicke:    Did  you  find  that  attitude  prevalent? 

McBaine:   Oh,  yes.   The  Japanese  in  those  days  weren't  allowed  to  own  land  in 
California,  didn't  you  know  that? 

Hicke:    Yes,  I  knew  there  was  that  official  attitude,  but  somehow  I  hadn't 
related  that  to  actually  not  sitting  next  to  them. 

McBaine:   I  can  only  tell  you  that's  what  happened  to  me.   The  result  was  it 

taught  me  a  lesson  I've  never  forgotten.   I  don't  think  it  helped  me 
solve  my  problem  with  the  blacks  or  helped  them  solve  their  problem 
with  the  Japanese  particularly.   Your  brain  can  conquer  your  emo 
tions,  but  it  can't  eliminate  them.   But  as  I  say,  it  just  showed 
the  whole  thing  as  so  nonsensical.   This  comes  from  the  conditioning 
as  a  child  and  your  whole  lifetime  to  something  you  see  that  means 
nothing  to  someone  else  who  has  not  been  conditioned  in  that  way, 
which  leads  to  a  lot  of  conclusions,  one  being  it's  going  to  take  a 
generation  or  more  to  make  any  dent  in  this  kind  of  problem.   You 
just  cannot  take  a  human  being  who's  been  conditioned  one  way  for 
fifteen  or  twenty  years  and  then  turn  him  around.   Intellectually  he 
can  do  it,  but  he  won't  do  it  inside. 

Hicke:    That's  a  good  illustration  of  that. 

McBaine:   It  was  fantastic.   Anyway,  the  second  incident  that  happened  to  me 

was,  at  the  end  of  the  first  semester  --  I  don't  know,  let's  say,  to 
make  the  story  as  good  as  possible,  I  had  all  A's.   When  I  came  back 
for  the  second  semester,  I  met  my  math  teacher  --  and  I  think  I  had 
her  again  for  the  second  semester  --  in  the  hallway  one  day.   She 
stopped  me  in  the  hall,  and  she  said,  "What  are  you  doing  for  the 
school?"   in  a  very  vigorous  tone  of  voice.   I  was  somewhat  taken 
aback  --  I  thought  she  was  a  friend  of  mine  --  and  I  said,  "Well, 
I've  been  studying  hard  and  trying  to  do  well  in  my  subjects."  She 
said,  "I'm  not  talking  about  that.   You  don't  have  any  trouble  with 
that.   I  want  to  know  what  you're  doing  for  your  school.   What  are 
you  doing  for  your  fellow  man  here  in  the  school?  Don't  you  do  any 
thing?" 

I  don't  remember  exactly  what  I  said,  but  I  know  that  I  weighed 
less  than  140  pounds;  Berkeley  High  School  had  a  140-pound-football 
team,  those  who  weren't  big  enough  to  play  on  the  varsity  team.   But 
football  was  over.   So  somehow  or  another  I  mentioned  that  when  I 


12 

was  in  Missouri,  I  played  some  basketball  because  of  this  coaching 
by  Don  Faurot  that  I  told  you  about. 

She  said,  "Well,  then  go  out  for  the  basketball  team.   Go  play 
on  the  basketball  team."  She  so  shamed  me  by  browbeating  me  this 
way  that  she  made  me  go  out  for  the  basketball  team.  Well,  Berkeley 
High  School  was  one  of  the  top  high  schools  in  northern  California 
in  its  athletic  teams.   But  here  I  was,  so  I  went  out  for  basket 
ball,  and  to  my  utter  astonishment,  I  made  the  team.   I  had  a  mar 
velous  time,  and  made  my  block  letter  in  basketball. 

Frankly,  I  never  would  have  had  the  get-up-and-gumption  to  do 
it  by  myself;  she's  the  one  who  made  me  do  it.   Of  course,  it  didn't 
hurt  my  studies  any;  I  didn't  take  that  much  time  at  it.   That's  the 
kind  of  thing,  as  I  say,  that  a  real  teacher  does.   It  isn't  how 
much  she  knows  about  her  subject,  it's  how  she  handles  the  human 
beings,  how  she  handles  the  students. 

Hicke:    She  knew  you  could  easily  handle  a  lot  more  than  your  studies. 


McBaine: 


Sure.   She  wasn't  bothered  about  that,  that's  what  she  said,  and  she 
was  right.   I  guess  I  didn't  have  the  self-confidence,  I  didn't  know 
what  I  could  do.  Here  were  all  these  kids  who  had  been  together  for 
three  years  in  the  school,  and  I  was  a  newcomer  in  the  fourth  year. 
Kids  at  that  age  aren't  terribly  hospitable  to  newcomers  anyway. 
However,  after  I  made  the  basketball  team,  I  got  to  know  lots  of 
people. 

Hicke:    She  probably  had  that  in  mind,  too. 


McBaine: 


She  probably  did.   When  I  look  back  on  my  education,  I  think  I  was 

very,  very  fortunate  all  the  way  through  high  school.  I  was  in 

public  schools.   I  think  I  got  as  good  an  education  as  I  could  have 
gotten  any  place. 

When  I  finished  at  Berkeley  High  School,  there  were  no  other 
considerations  in  mind  except  the  University  of  California.   I  think 
one  of  the  reasons  for  that  is,  having  grown  up  in  Missouri,  I  guess 
Missouri  and  northern  Michigan  were  the  only  two  parts  of  the  union 
that  I  really  had  seen  up  to  that  point  in  my  life,  and  I'd  only 
been  in  California  a  year,  so  there  was  no  discussion  about  going 
someplace  else  to  college.   I  expect  that  had  my  parents  even 
broached  such  an  idea,  I  would  have  opposed  it  stoutly  because  of 
having  been  uprooted  once.   I  don't  remember  thinking  this 
expressly,  but  I  suppose  I  would  have  been  reluctant  to  want  to  go 
some  other  place  because  California  was  an  attractive  place.   It  was 
supposed  to  be  the  place  of  the  future.   So  I  did  go  to  the  Univer 
sity  of  California. 

There  again,  I  think  I  was  very  fortunate,  particularly  when 
you  consider  the  subsequent  history  of  the  University  of  California, 
and  I  mean  particularly  by  that,  the  college  at  UC.   When  I  was 
there,  Dr.  William  Wallace  Campbell  was  the  president  of  the  univer- 


13 


Hicke: 

McBaine; 

Hicke: 

McBaine : 


sity  for  my  freshman  year,  and  he  was  an  old  boy  with  enormous 
eyebrows,  an  astronomer,  with  absolutely  no  personality.   I  doubt  if 
he  knew  an  undergraduate.   But  in  any  case,  he  was  succeeded  by  Bob 
Sproul  at  the  end  of  my  freshman  year. 

Sproul  was  not  the  type  of  university  president  that  the  pri 
vate  universities  have.   He  was  not  a  distinguished  academician,  but 
he  was  a  superb  president  for  the  University  of  California  or, 
indeed,  for  any  state  university,  in  many  ways.   One  of  the  ways  was 
that  he  was  smart  enough  to  have  a  staff  around  him  who  was  distin 
guished  academically.   The  provost  of  the  university,  as  the  number 
two  man  was  called,  was  Monroe  Deutsch,  who  was  a  professor  of 
Latin,  professor  of  Classics,  and  a  very  distinguished  academician. 
So  between  them  they  made  up  a  tremendous  team.   Sproul  was  a  ter 
rific  man,  much  as  Wally  Sterling  was  in  later  days  at  Stanford: 
same  personality,  the  same  ability  to  appeal  to  and  lead  youngsters. 
As  an  example,  Sproul  knew  by  name  and  called  by  name  every  student 
on  the  campus  who  really  did  anything  at  all  to  distinguish  himself 
or  herself.   Again,  like  Miss  Abbott  in  Berkeley  High  School,  "What 
have  you  done  for  your  school?"  You  were  assumed  to  be  able  to 
handle  the  bookwork. 

My  four  years  as  an  undergraduate  there,  in  retrospect,  were 
just  marvelous.   I  think  a  lot  of  the  problems  the  University  of 
California  has  had  later  on  were  not  incipient  at  that  time.   Most 
of  the  classes  were  taught  by  professors,  not  by  teaching  assis 
tants,  and  most  of  the  students,  if  they  wanted  to  know  their  prof 
essors,  they  could  get  to  know  their  professors.  The  professors 
didn't  conclude  a  lecture  and  then  immediately  disappear  out  the 
back  door  so  nobody  could  get  to  them.   So  despite  the  fact  that  it 
was  a  big  university,  there  was,  at  least  among  the  people  that  I 
knew,  no  feeling  of  remoteness  or  being  shut  out  by  a  bureaucracy  or 
anything  of  that  kind.   Again,  I  think  I  was  extremely  fortunate. 

Should  we  move  on  to  Oxford  University? 

No,  I'd  like  to  talk  about  the  undergraduate  years  at  Cal  a  little. 

Fine. 

I  can  remember  quite  a  number  of  influential  courses  and  professors. 
For  one  thing,  I  took  a  very  catholic  curriculum.   I  had  already 
intended  to  become  a  lawyer,  but  I  really  didn't  think  that  I  should 
take  nothing  but  pre-legal  courses,  so  I  took  a  little  bit  of  every 
thing  I  was  interested  in.   I  took  a  course  in  anthropology,  I  took 
a  course  in  accounting,  English  courses  of  course  you  had  to  take. 
One  of  the  most  influential  courses  and  professors  I  had  I  think  was 
in  philosophy,  with  a  German  philosophy  teacher  whose  name  was  Loew- 
enburg,  and  I  want  to  tell  you,  if  you  could  stay  up  with  his 
mental  convolutions,  you  could  stay  up  with  anything.   But  it  was  a 
fascinating  course. 


14 

In  addition  to  that,  I  did  a  number  of  things:   one  is  I  joined 
the  Naval  R.O.T.C.  At  that  time  in  Berkeley,  all  undergraduates 
were  required  to  do  two  years  of  R.O.T.C..   In  the  Army  Reserve 
Officer  Training  Corps,  only  two  years  was  required.   In  the  navy, 
four  years  was  required.   So  I  signed  up  with  the  navy,  and  there 
were  a  number  of  reasons  I  did  so:   one,  there  were  a  lot  of  courses 
like  astronomy,  which  I  took,  that  fitted  in  with  the  naval  cur 
riculum.  At  the  same  time,  I  was,  as  I  say,  after  a  broad  spectrum, 
so  I  liked  that  sort  of  thing. 


McBaine: 


Hicke: 
McBaine: 


The  head  of  the  Naval  R.O.T.C.  and  founder  of  the  unit  there,  which 
was  founded,  I  think,  only  a  year  before  I  came  to  college,  was  then 
Captain  Chester  Nimitz  --  later  Fleet  Admiral  Nimitz  in  World 
War  II  --  who  remained  a  friend  of  mine  for  the  rest  of  his  life  as 
a  result  of  this  experience. 

Also,  the  Naval  R.O.T.C.  unit  took  a  summer  cruise  each  summer, 
and  it  must  be  something  about  my  Scots  ancestry  that  I  got  into  all 
these  things  like  Camp  Sosowagaming  and  so  forth.   For  three  years 
in  a  row  I  made  a  cruise:   first  I  made  a  cruise  on  a  battleship  to 
Hawaii  in  my  freshman  year.  Then  I  believe  in  my  sophomore  year  I 
drove  across  the  country  with  a  friend,  had  a  marvelous  trip.   We 
went  down  through  Arizona  and  New  Mexico,  and  then  I  went  with  the 
Yale  unit  and  two  other  units  on  three  different  destroyers  from  one 
of  the  New  England  ports  to  Bermuda.   Those  were  nice  places  to  go 
on  a  cruise. 

Join  the  navy  and  see  the  world. 

That's  why  I  got  into  this  thing.   The  third  cruise  was  again  on  a 
battleship  up  to  Vancouver.   Again  --  you  were  asking  about  influ 
ences  --  those  were  very  good  influences,  in  my  opinion.   On  the 
cruise  to  Bermuda,  I  was  made  the  navigator  by  the  captain;  of 
course,  they  had  a  real  navigator,  thank  God,  not  just  me.   But  I 
was  supposed  to  do  what  the  real  navigator  was  supposed  to  do,  which 
was  that  for  the  24  hours  of  my  watch  I  was  required  to  be  ready  to 
tell  the  captain  of  the  ship  at  any  moment  the  position  of  the  ship. 

Of  course,  as  I  say,  if  he  had  been  relying  on  me  we  would  have 
been  aground  or  sunk,  because  off  Cape  Hatteras  I  got  seasick  --  the 
only  time  in  my  life  I've  ever  been  seasick.   In  any  case,  the 
responsibility  for  that,  and  the  work  involved  in  that,  having  to 
perform  under  real  conditions  instead  of  a  textbook  exercise,  was 
good  for  me  . 

The  other  thing  is  we  had  gunnery  training.   We  had  to  learn 
how  to  fire  the  different  guns,  including  the  16-inch  guns  on  the 
battleships.  Again,  that's  a  matter  of  teamwork  involved  there,  and 
it's  deadly  serious  teamwork.   And  the  navy's  method  of  teaching  you 
gunnery  in  those  ways  was  for  the  instructor  to  assemble  the  stu 
dents  who  are  supposed  to  learn  how  to  fire  a  particular  gun  at  that 


Hicke: 
McBaine: 
Hicke: 
McBaine: 


15 

gun  and  say,  "Now  first  you're  supposed  to  do  this,  and  second  that, 
and  then  this  and  that,"  etc.,  etc.   "Now  remember  what  I  told  you. 
If  you  don't,  and  you  do  something  the  wrong  way,  there  will  be 
trouble.   In  1920  there  was  an  explosion  on  the  battleship  so  and 
so,  and  eighteen  men  were  killed.   In  1918  there  was  an  explosion  on 
some  other  ship,  and  twenty-five  people  were  killed,"  and  so  on.   By 
the  time  he'd  gone  through  the  roster  of  possible  mistakes,  you'd 
think  you  could  blow  up  the  whole  U.S.  Navy. 

Some  people  concluded  from  that  that  they  weren't  cut  out  to  be 
gunners,  and  it's  a  good  thing  that  they  learned  it.   But  I  had  to 
go  through  all  this  training,  which,  in  retrospect  I  regard  as 
valuable.   I  was  one  of  the  people  who  pulled  the  trigger  on  a 
loaded  sixteen-inch  gun,  for  goodness  sake,  which  had  a  reduced 
powder  charge,  of  course,  but  it  was  still  quite  an  experience;  it 
wasn't  a  full  charge  of  powder  in  the  gun.   Anyway,  those  cruises  -- 
not  only  were  they  marvelous  times,  broadening  experiences,  particu 
larly  the  trips  to  Bermuda  and  Vancouver,  I  think  they  were  mar 
velous  training. 

I  also  wound  up  as  the  commanding  officer  of  the  Naval  R.O.T.C. 
unit  my  senior  year  at  Cal,  which  almost  caused  me  to  faint.   I'd 
been  the  third  man  in  the  rear  rank  of  Squad  Number  4  for  three 
years,  just  marching  around  in  whatever  direction  the  fellows  on 
either  side  of  me  went.   When  they  went  right,  I  went  right.   When  I 
came  back  for  my  senior  year  in  college,  I  got  a  call  from  the  then 
captain,  no  longer  Captain  Nimitz,  who  was  head  of  the  Naval  R.O.T.C 
unit.   He  asked  me  to  come  in  and  see  him,  so  I  did.   School  was  two 
or  three  days  off,  and  he  said  to  me,  "How's  your  command  voice?"   I 
said  I  didn't  know  what  he  was  talking  about.   And  he  said,  "Well, 
let's  hear  you  give  a  command."  I  said,  something,  I  don't  remember 
what  it  was,  and  he  wasn't  very  impressed  by  that,  and  he  told  me 
I'd  have  to  practice  a  little  bit. 

He  gave  me  a  few  lessons:   speak  from  the  diaphragm  and  not 
entirely  from  your  vocal  cords,  much  like  a  singer.   So  he  said, 
"You're  going  to  be  the  commandant  of  a  corps  here,  and  you  have  to 
take  them  all  out  and  drill  them  all."  Well,  I  want  to  tell  you 
that's  when  I  thought  I  was  going  to  faint,  because  it's  no  easy 
matter.   You  get  several  hundred  people  out  there  all  lined  up  in 
squads  and  companies  and  battalions,  and  you  start  them  marching 
around,  and  you've  got  a  juggernaut  on  your  hands;  if  you  don't  do 
the  right  thing,  it's  going  to  be  the  most  godawful  mess,  and  that's 
exactly  what  I  produced  the  first  time  I  had  them  out. 

Did  you  go  to  the  library  and  get  a  book  on  it? 

No. 

What  else  could  you  do? 

They'd  been  doing  this,  they'd  been  teaching,  as  I  say,  but  it  was 
only  the  student  officers  who  paid  any  attention  during  my  first 


16 

three  years.   I  didn't  pay  any  attention  to  it;  I  was  a  guy  in  the 
rear  ranks.  The  only  thing  I  could  quarrel  with  is  they  didn't  give 
you  any  advance  notice,  they  didn't  bring  you  along  from  year  to 
year.   All  the  officers  were  seniors. 

Hicke:    So  they  all  left  at  once? 

McBaine:   Yes,  so  they  all  left  at  once,  and  the  new  class  came  in.   After  I 
got  over  that,  I  enjoyed  it  a  good  deal.   Again,  it  was  a  memorable 
experience.   Now  the  other  thing  I  guess  I  did,  I  did  a  number  of 
things  --is  this  getting  too  long  and  boring? 

Hicke:    Not  in  the  least,  this  is  wonderful.   I  really  appreciate  your  dig 
ging  back  into  your  memory  and  recalling  some  of  these  things. 

McBaine:  Some  of  these  things  shape  one's  views,  of  course. 

Hicke:  That's  why  I  put  all  these  things  on  the  outline. 

McBaine:  I  was  surprised  that  you  did  when  I  read  it. 

Hicke:  Let's  keep  going. 

McBaine:   It's  fun  to  reminisce.   I  was  just  thinking  of  some  of  the  other 
things.   I  was  very  active  in  all  sorts  of  activities.   Again,  I 
didn't  have  any  pressure  on  me;  I  didn't  have  to  work.   I  should  say 
I  joined  a  fraternity  and  I  lived  in  the  fraternity  house.   Again,  I 
have  nothing  except  good  to  say  about  that.   We  had  no  chaperones  in 
my  day,  but  life  is  so  different  now,  these  undergraduates  are  so 
different.   But  I  emphasize  that  we  had  no  housemothers,  no  adults 
in  the  place  at  all.   During  my  four  years  there  we  never  had  a 
single  untoward  incident.   People  drank,  it  was  during  Prohibition, 
but  there  was  never  a  girl  in  the  house  except  at  an  approved  dance. 
There  was  never  any  gambling  in  the  house.   God  forbid,  it  never 
occurred  to  anybody  that  there  might  be  dope.   We'd  never  even  heard 
of  marijuana,  much  less  cocaine.   The  members  paid  their  bills,  they 
kept  the  house  clean,  and  it  was  done  on  a  hierarchy  system:   the 
freshmen  did  the  manual  labor.  We  had  an  initiation  that  involved 
some  hazing,  but  it  was  all  sensible.   One  thing  that  modern  people 
express  horror  at  is  tubbing.   Did  you  ever  hear  of  that? 

Hicke:    Yes.   I'm  not  too  familiar  with  it. 

McBaine:   It's  a  method  of  discipline.   You  fill  a  tub  with  a  foot  or  two  of 
water  and  put  somebody  in  it  on  his  back,  and  then  put  him  down  and 
hold  him  under  for  thirty  seconds.   That  sort  of  thing  can  get  out 
of  hand,  I  suppose,  but  there  were  never  any  untoward  results  in  the 
whole  university;  it  was  commonly  done  when  I  was  at  the  University 
of  California.   Paddling  was  not  done,  but  tubbing  was.   Obviously  I 
don't  have  any  bad  recollections  of  it,  because  it  didn't  produce 
any  bad  results. 


17 

So  when  I  see  the  lack  of  discipline  and  lack  of  even  lawful 
ness  going  on  now  in  these  student  living  houses,  and  even,  indeed, 
in  my  own  fraternity,  it  just  isn't  like  it  was  when  I  was  there.   I 
was  the  president  of  my  house  in  my  senior  year,  and  I  want  to  tell 
you  anybody  who  pulled  anything  like  that  would  have  been  under  that 
water  for  a  long,  long  time,  in  my  day. 

Hicke:    That  was  your  method  of  discipline? 

McBaine:   You  bet  it  was.   And  we  did  it  all  ourselves.   There  wasn't  any  out 
sider  in  there  doing  anything  about  it;  it  had  to  be  done  by  common 
consent.   I  look  back,  as  I  say,  on  that  as  a  very  positive  part  of 
my  experience.   I'll  come  back  to  the  no  drinking  stuff  a  little 
later. 

I  also  played  freshman  basketball  for  California,  and  again,  my 
somewhat  widespread  interests  got  the  better  of  me.   I  was  invited 
by  a  friend  whom  I'd  made  in  college  who  lived  in  Pasadena  to  come 
down  to  Pasadena  for  the  Christmas  vacation  with  him.   So  I  did.   I 
don't  think  I'd  ever  been  in  Los  Angeles.   The  freshman  basketball 
coach  took  great  exception  to  that;  he  thought  I  should  have  stayed 
here  and  practiced  all  during  the  Christmas  vacation.   So  he  put  me 
on  his  black  list  and  when  I  showed  up,  when  I  came  back  for  the 
spring  semester,  there  I  was  sitting  on  the  bench.   He  gave  me  to 
understand  I  was  going  to  continue  to  sit  on  the  bench,  so  I  quit. 
I  don't  think  I  was  all  that  much  of  a  basketball  player  anyway,  to 
tell  you  the  truth  --  all  right  for  high  school  maybe,  but  I  wasn't 
going  to  have  any  distinguished  career  in  college. 

So  then  I  went  out  for  a  lot  of  other  things :   I  went  out  for 
track  manager.   We  had  a  student  managerial  system  at  California;  I 
suppose  they  still  have.   And  again,  that  was  a  very  important 
activity  among  the  students.  Those  spots  were  widely  competed  for. 
You  only  went  out  your  sophomore  year.   Any  number  of  sophomores 
could  go  out  for  any  sport  they  wanted  to:   football,  basketball, 
whatnot.   Then  a  certain  number  of  those  were  selected  at  the  end  of 
the  year  as  juniors,  usually  about  six;  maybe  football  had  eight. 
They  were  junior  managers.   Then  one  was  picked  to  be  the  senior 
manager  the  following  year.   They  were  important  positions  in  the 
student  community,  sort  of  ranked  by  the  sports;  the  football  man 
ager  was  the  most  elevated,  I  guess,  football  being  the  prime  sport. 

I  had  a  marvelous  time  out  of  that,  and  became  the  senior  track 
manager.   As  luck  would  have  it,  the  year  I  was  the  senior  track 
manager,  we  had  the  NCAA  [National  Collegiate  Athletic  Association] 
track  meet,  which  is  for  all  the  colleges  in  the  country,  at 
Berkeley  in  Edwards  Stadium,  which  was  dedicated  that  year;  it  was 
brand  new.   I  was  the  manager  for  the  meet.   I  was  in  charge  of  the 
meet . 

Hicke:    In  1932? 


18 

McBaine:   In  '32,  yes.   Also,  the  Olympic  Games  were  in  Los  Angeles  that  year, 
and  the  American  Olympic  tryouts  were  one  week  later,  after  the  NCAA 
at  Berkeley,  down  at  Stanford  [University] .   And  then  two  or  three 
weeks  after  that,  the  Olympic  Games  began  in  Los  Angeles.   I  went 
down  to  the  Stanford  meet.   Of  course,  I  was  on  the  field  as  a 
visitor  down  there,  the  manager  of  the  NCAA  meet  here.   I  didn't 
have  anything  to  do  on  the  field  in  the  Olympic  Games,  but  I  went  to 
Los  Angeles  and  went  to  all  the  track  and  field  and  other  events  and 
had  a  marvelous  time.   I  knew  all  the  American  athletes  in  the  var 
ious  events  --  in  the  track  and  field  events  at  any  rate  --  at  the 
Olympics,  so  it  made  a  marvelous  summer  for  me.   As  I  say,  I  think 
that  was  better  than  playing  basketball. 

There  was  one  other  thing  that  I  think  influenced  me  all  the 
way  through  the  University  of  California.   As  I  say,  I  just  can't 
say  enough  for  the  university.   I  don't  think  anyone  at  Williams  or 
Dartmouth  --  and  I  have  lots  of  friends  who  went  to  one  or  the 
other  --  could  have  had  a  more  personalized,  satisfactory  four  years 
in  college  than  I  did.   That  may  not  be  a  fair  comparison,  because 
maybe  a  wider  spectrum  of  the  students  at  those  smaller  colleges  get 
all  this  personal  attention,  but  as  far  as  I'm  concerned,  I  just 
felt  the  whole  thing  was  a  candy  store,  looking  back  on  it,  with  all 
the  professors,  the  dean  of  men,  the  president's  office,  and  the 
provost  who,  as  I  say,  was  a  friend  of  mine.   Of  course,  all  those 
older  men  knew  my  father  and  were  good  friends  with  him,  which  cer 
tainly  didn't  hurt  me  any.   So  it  was  a  thoroughly  good  experience. 

We  had  one  last  experience  that  I  think  was  significant,  influ 
ential.   We  had  the  honor  system  at  Berkeley  in  those  days,  and  we 
also  had  student  government.   And  by  student  government,  we  meant 
just  that:   students  were  in  charge  of  everything,  including  student 
discipline  and  expelling  and  suspending  students.   To  be  realistic 
about  it,  I'm  sure  the  administration  retained  the  power  to  act  over 
and  above  the  student  council,  if  you  will,  if  they  felt  they  wanted 
to,  but  the  student  council  was  charged  with  those  responsibilities. 

The  student  council  was  made  up  of  three  seniors  and  two  jun 
iors.   I  don't  remember  how  many  were  boys  and  how  many  were  girls 
at  this  juncture,  but  I  know  I  was  asked  to  be  one  of  the  junior 
members.   At  that  time  --  as  I  say,  it  was  Prohibition  --  I  drank. 
As  a  matter  of  fact,  I  don't  think  I  knew  anybody  who  didn't.   Vir 
tually  everybody  on  the  campus  who  really  wanted  to  be  anything  in 
campus  activities  did  drink;  otherwise  you  were  considered  eccen 
tric.   The  only  fellow  I  ever  knew  who  was  a  student  leader  and  made 
a  big  name  for  himself  but  didn't  drink  was  Herbie  Fleishhacker,  who 
was  at  Stanford.  He  was  a  teetotaler  then  and  always  was  until  he 
died. 

In  any  case,  that's  why  I  feel  I  know  something  about  these 
kids  today  who  get  caught  up  in  smoking  pot;  the  peer  pressure  is 
there,  whether  you  realize  it  or  not.   I  didn't  realize  it  at  the 
time,  but  looking  back  on  it,  I  can  see  that  there  was,  because  I 
was  obviously  interested  in  a  lot  of  these  activities,  and  if  you 


19 


get  into  an  activity,  you  want  to  do  well, 
game,  I  guess. 


So  that's  part  of  the 


Hicke: 

McBaine: 


Hicke: 
McBaine: 


Hicke: 
McBaine: 


When  I  was  asked  to  be  on  the  student  council,  as  I  say,  one  of 
the  problems  was  that  it  was  illegal  to  drink  on  campus  or  to  have 
anything  to  drink,  and  that  was  the  kind  of  thing  that  came  up 
before  the  student  council  for  discipline.   I  was  torn  about  what  to 
do,  but  I  didn't  want  to  give  up  drinking.   I've  often  wondered  if 
there  was  something  else  on  my  mind:   that  I  just  didn't  really  want 
to  do  the  dirty  job  at  all,  which  might  have  influenced  my  thinking. 
So  I  went  to  the  dean  of  men  and  I  told  him  I  was  very  sorry,  but  I 
had  to  decline,  because  I  drank  and  didn't  want  to  give  up  drinking, 
and  I  was  not  going  to  continue  drinking  and  then  suspend  somebody 
from  school  for  doing  what  I  did  myself. 

He  didn't  say  anything,  but  he  called  me  up  a  few  days  later, 
and  I  don't  know  exactly  what  he  said;  probably  he'd  discussed  the 
matter  with  Dean  Deutsch  or  President  Sproul.   Anyway,  he  said  he'd 
make  an  exception  in  this  case.   The  committee  would  have  no  juris 
diction  over  drinking  offenses  while  I  was  on  it.   I  spent  two  years 
on  that:   my  junior  year  and  my  senior  year. 

He  really  wanted  you  to  be  on  the  student  council. 

All  I  can  do  is  recite  the  facts;  I  don't  know  what  went  into  it. 
And  it  was  not  all  fun,  by  any  manner  of  means;  it  was  more  non-fun 
than  it  was  fun.   You  may  think  that  sounds  interesting,  but  for  the 
average  youngster,  it's  no  fun  sitting  there  judging  your  peers  and 
meting  out  punishments,  even  when  you  get  to  cases  of  cheating  in 
exams.   That's  the  principal  job  we  had,  the  biggest  thing,  because 
we  had  the  honor  system  and  there  were  no  proctors  in  the  exams. 
That ' s  no  fun . 

But  it's  a  slice  of  life. 

Yes,  it's  a  slice  of  life.   Just  as  a  footnote  to  that,  in  this  late 
day  and  age,  it  seems  incredible  to  me,  but  when  I  was  in  college  I 
belonged  to  two  drinking  societies:   one  was  during  my  sophomore 
year,  and  one  was  during  my  senior  year.   The  second  one  was  called 
Kappa  Beta  Phi.   I  don't  know  if  still  exists  at  Berkeley  or  not;  I 
hope  these  drinking  societies  don't  exist  any  more.   That's  a 
reversal  of  Phi  Beta  Kappa;  it  gave  me  some  perverse  pleasure  that  I 
had  it  both  ways. 

Yes,  I  noticed  in  the  files  you  were  Phi  Beta  Kappa,  too. 

I  don't  drink  hard  liquor  at  all  now,  haven't  for  a  number  of  years. 
It  just  seems  incredible  to  me  that  I  probably  drank  more  alcohol  my 
sophomore  year  in  college  than  I  ever  drank  in  any  subsequent  year 
in  my  whole  life. 


Hicke:    It  didn't  stop  you,  I  guess. 


20 


McBaine: 


Hicke: 
McBaine: 


Hicke: 

McBaine: 

Hicke: 

McBaine: 

Hicke: 

McBaine: 

Hicke: 

McBaine: 


No,  I  guess  not.  As  I  say,  it's  hard  to  think  that  I  could  have 
done  that.  The  object  there,  in  the  initiation  particularly,  was  to 
get  everybody  drunk,  and  then  see  how  long  it  would  take  them  before 
they  could,  say,  make  it  to  a  formal  dance  which  was  being  given. 
If  you  had  had  a  glass  and  a  half  of  alcohol  to  drink  at  3:30  to 
4:30  in  the  afternoon,  what  time  would  you  be  able  to  make  it  to  the 
dance  that  night?  I  can't  say  I'm  very  proud  of  that,  but  at  the 
time  I  enjoyed  it. 

I  see  that  you  graduated  in  1932. 

I  did  have  an  interesting  time  at  graduation.   I  was  the  salutato- 
rian  of  the  class.  They  had  salutatorians  then;  I  don't  know 
whether  they  do  now  or  not.  The  graduation  ceremony  took  place  in 
Memorial  Stadium  and  filled  just  about  one  end  of  it,  I  guess;  there 
must  have  been  about  25,000  people  there. 

I  had  to  give  a  speech,  which  I  reread  on  occasion  and  find 
totally  uninspiring,  I  must  say.   I  don't  think  I  was  any  young  Win 
ston  Churchill,  I'll  tell  you  that.   But  it  was  a  big  thrill.   It 
was  the  biggest  crowd  I've  ever  spoken  to,  before  or  since,  I  guess. 
In  those  days  the  president  of  the  university  handed  out  a  diploma 
to  each  graduate,  and  they  had  somebody  give  him  the  names  as  they 
came  up.   He  didn't  know  all  the  members  of  the  class,  but  it  was  a 
marvelous  ceremony. 

Just  to  digress  a  minute:   when  my  younger  son  graduated  from 
Harvard,  maybe,  fifteen  to  twenty  years  ago,  I  went  back  to  the 
graduation.   To  my  absolute  horror,  they  gave  out  not  only  the 
undergraduate  degrees  but  the  Ph.D's  by  having  the  candidates  for 
the  particular  degree  being  given  rise  in  their  seats,  and  then  the 
president  would  intone  this  speech,  "I  hereby  confer  upon  you  the 
degree  of  Doctor  of  Philosophy,"  and  so  forth,  and  then  they'd  sit 
down  again.   Somebody  puts  in  nine  years,  let's  say,  of  work  on  phy 
sics  or  something,  and  that's  the  kind  of  send-off  he  gets  today! 

You  can't  depend  on  graduation  ceremonies  for  recognition. 

That  just  horrified  me.  They  didn't  do  that  in  1932  anyway. 

So  you  actually  shook  the  president's  hand  and  got  the  diploma? 

Yes. 

Was  the  diploma  actually  in  his  hand? 

Yes,  absolutely. 

* 

Now  I  think  they  give  you  an  empty  tube  and  you  have  to  go  and  get 
your  diploma  later  on. 

Of  course,  he  had  assistants  handing  him  the  diplomas  and  telling 
him  the  names;  it  was  very  well  organized.   All  the  families  or 


21 

guests  of  graduating  seniors  were  sitting  in  the  stands,  and  they 
got  to  see  little  Johnny  march  up  and  shake  the  president's  hand. 
That's  the  way  it  ought  to  be. 

I  can't  recall  now  who  it  was  who  first  spoke  to  me  about 
applying  for  a  Rhodes  scholarship.   There  were  several  Rhodes 
scholars  that  I  knew.   One  was  Bertram  Bronson,  who  died  just 
recently;  he  was  a  professor  of  English  at  Berkeley,  a  former  Rhodes 
scholar.   I  had  him  for  freshman  English,  which  as  you  know,  was 
then  Iconoclasm  IA,  and  he  was  a  marvel  at  it.   I've  tried  to  think 
in  connection  with  this  history  who  it  was  who  suggested  it  to  me, 
and  I  don't  remember,  but  somebody  did,  that's  the  point.   I  didn't 
think  of  it. 


McBaine:   I  probably  knew  there  was  such  a  thing  as  the  Rhodes  scholarships, 
but  frankly,  for  one  reason  or  another,  I  was  busy  having  a  good 
time  my  senior  year  with  all  the  activities  I  was  involved  in,  and  I 
always  enjoyed  my  school  work.   I  could  say  frankly  that  there 
wasn't  a  single  course  I  took  in  the  University  of  California  that  I 
didn't  enjoy.   Some  of  them  were  widely  different.   Some  of  them 
were  pretty  damn  dull,  but  they  were  intellectually  stimulating  if 
you  just  bore  down  on  them.   The  opposite  extreme  was  political  sci 
ence,  whatever  the  number  was,  from  General  David  Prescott  Barrows, 
a  former  president  of  the  university,  who  was  the  commanding  general 
of  the  American  Expeditionary  Force  sent  into  Siberia  at  the  end  of 
World  War  I.   I'm  not  sure,  but  I  believe  he  was  a  National  Guard 
officer.   In  any  case,  he  was  the  commanding  general,  and  he  had 
been  the  president  of  the  university,  and  had  retired  and  been  suc 
ceeded,  as  I  say,  by  Campbell  and  then  Sproul,  and  he  gave  this 
course  in  political  science.   I  don't  know  what  the  title  of  it  was, 
but  all  I  can  remember  is  that  about  the  second  time  the  class  met, 
he  gave  the  final  examination. 

Hicke:    That  was  an  unusual  course. 

McBaine:   And  I  want  to  tell  you,  it  was  the  strangest  course  I've  ever  had  at 
any  place,  but  one  of  the  most  fascinating.   From  an  academic  point 
of  view,  I  don't  know  whether  one  could  say  whether  or  not  you 
learned.   It  was  hard  to  put  your  finger  on,  let's  say,  because  all 
he  did  was  reminisce  about  his  experiences,  but  he  had  a  fascinating 
life.   It  was  marvelous  to  hear  about  this  particular  episode  of 
history:   the  White  Russians  fighting  against  the  Bolsheviks.   But  I 
never  took  another  course  where  the  final  exam  was  given  on  the 
second  day  of  the  course.   That  confused  everybody. 

Hicke:    You  didn't  have  to  do  much  studying  for  it.   [laughs] 

McBaine:   No.   But  anyhow,  I  really  did  enjoy  all  of  these  things.   I  suppose 
my  professors  must  have  been  the  principal  reason  why  I  was  selected 
for  a  Rhodes  scholarship.   I  suppose  it  was  the  same  thing  as  it  is 
now.   You  make  an  application  for  the  scholarship,  and  you  name  a 


22 

certain  number  of  sponsors,  and  they  write  to  the  committee  members, 
and  then  you're  interviewed  by  the  selection  committee.   Here  again, 
I  really  owe  this  to  my  teachers,  and  not  to  myself.   I  was  so  busy 
with  all  of  these  track  meets  and  everything  else  that  was  going  on, 
it  just  really  never  occurred  to  me  to  think  about  a  scholarship 
someplace  else. 

Fortunately,  somebody  did  think  about  it,  and  I  did  apply,  and 
was  selected. 


Oxford  University 


Hicke:    Tell  me  about  Oxford  University.   I  believe  you  studied  Roman  Law 
and  Comparative  Law,  for  example. 

McBaine:   Those  are  really  minor  aspects  of  the  Oxford  experience.   The  major 
aspects  are  these:   in  the  first  place,  I  want  to  say  that  I  was 
fortunate  in  one  way  in  that  a  noted  Oxford  professor,  Dr.  Cyril 
Bailey,  who  was  professor  of  Latin  and  the  Classics  --  probably  he 
spoke  Greek  as  well  --  had  been  a  visiting  professor  at  Berkeley 
when  I  was  selected  as  a  Rhodes  scholar.   Someone  told  me  about  him 
after  I  was  selected,  and  I  met  him  in  Berkeley,  and  he  was  a 
delightful  man. 

When  I  arrived  at  Oxford,  he  and  his  wife  had  returned  there, 
and  had  a  lovely  house  on  the  outskirts  of  Oxford.   He  was  the  Uni 
versity  Orator  at  that  time,  who  is  an  official  who  speaks  at  all 
public  ceremonies  at  Oxford.   He  delivers  the  citation  for  all  hon 
orary  degrees,  for  example,  all  of  these  in  Latin.   I  don't  know  if 
that's  still  done  or  not.   Through  his  good  offices,  I  met  more  of 
the  academic  faculty,  I  suppose,  than  I  otherwise  would  have  met. 

The  very  first  thing  I  should  note  about  Oxford  is  that  I  have 
never  been  in  a  community  like  that  where  the  intellectual  level  was 
far  above  any  other  place  I  have  ever  been,  and  that  includes 
Berkeley.   I  grew  up  in  a  university  town,  the  University  of 
Missouri,  and  Berkeley  in  those  days  was  a  small  town  when  I  was 
there  with  a  very  high  intellectual  level,  but  Oxford  was  simply 
incredible. 

That  includes  numbers  of  people,  not  only  the  dons,  as  they 
call  the  professors,  but  all  the  other  people  there:   their  spouses, 
for  example.   If  you  went  among  the  townspeople  it  wasn't  so  appa 
rent,  but  you  didn't  see  them  much.   It  was  the  people  you  saw  who 
were  connected  with  the  university  community,  even  the  booksellers. 
There's  a  famous  bookstore  in  Oxford  called  Blackwell's.   It's  been 
there  for  a  hundred  or  two  hundred  years.   Just  the  bookstore  is  an 
example.  There  were  lots  of  salesmen  hanging  around.   The  rule  in 
Blackwell's  was  no  salesman  would  ever  speak  to  a  customer  --  he 
waited  for  the  customer  to  speak  to  him.   Let's  say  you  go  in  there 


23 


Hicke: 

McBaine: 

Hicke: 

McBaine: 

Hicke: 

McBaine: 


and  there's  some  ancient  classic  there  that  you  have  your  heart  set 
on;  you  can  go  in  there,  and  I  don't  think  they've  got  any  chairs, 
but  if  you  stand  up,  you  can  stand  there  and  read  that  book  from 
nine  in  the  morning  until  five  in  the  afternoon  and  nobody  will  ever 
throw  you  out.   So  that's  point  number  one. 

Point  number  two  about  it  is  it's  a  totally  different  method  of 
approaching  education,  one  which  is  certainly  significant  here.   I 
don't  know  how  many  times  I've  heard  somebody  say  in  this  country, 
"I  don't  know  anything  about  astronomy,  I  never  had  a  course  in 
that."  You  never  hear  anybody  say  that  in  England.   At  Oxford,  and 
I'm  sure  the  drill  is  the  same  --  I'm  lapsing  into  some  Briticisms 
now  --  at  Cambridge,  each  student  has  a  tutor  appointed,  and  the 
tutor  assigns  readings  to  you. 

Most  of  the  classes  are  given  by  college  dons,  and  many  of  them 
are  given  in  the  particular  college.  Some  of  them  are  given  in  the 
university  buildings.   The  university  buildings  have  lecture  halls. 
Those  are  the  bigger  ones,  where  the  examinations  are  given;  an 
examination  hall  seats  quite  a  number  of  people.   You  can  go  to 
those  lectures,  if  you  want  to.   You  don't  have  to,  there's  no 
attendance  taken.   And  you  can  take  notes,  if  you  want  to,  but  that 
again  is  not  required.   You  do  have  to  go  and  see  your  tutor  once  a 
week,  and  your  tutor  assigns  a  topic  to  you  each  week.   You  report 
on  that  the  following  week,  which  requires  certain  reading  and 
presumably  also  some  of  these  courses  that  you  should  be  what  we 
call  auditing. 

The  point  is  you're  encouraged  to  do  this  reading  more  or  less 
on  your  own.   And  --  most  people  don't  realize  it  --  Oxford  is  only 
in  session  twenty-four  weeks  out  of  the  year.   Twenty-eight  weeks  of 
the  year  you're  on  vacation. 

Is  that  in  quotes? 

You're  absolutely  out. 

You  aren't  even  reading  or  anything? 

You're  supposed  to. 

That's  what  I  meant. 

That's  what  the  English  boys  do,  sure.   The  scholarships  are  for  two 
years  or  three  years,  or  were  then;  you  could  stay  three  years,  if 
you  wanted  to.   Some  people  stayed  three  years  and  took  a  Bachelor 
of  Civil  Law,  it  was  called,  which  is  an  advanced  degree  over  an  AB 
in  Jurisprudence,  and  then  came  back  here  and  went  into  practicing 
law.   I  have  a  friend  who  is  a  Rhodes  scholar  from  Stanford  who  did 
that. 

I  didn't  do  that.   My  father  taught  here  at  Boalt  Hall,  and 
with  his  advice,  I  intended  to  come  back  to  Boalt  Hall.   In  fact,  I 


24 

intended  to  come  back  to  Harvard  and  finish  at  Harvard,  but  Harvard 
wouldn't  give  me  any  credit  for  the  two  years  I  did  at  Oxford,  and 
that  would  have  meant  three  more  years  at  Harvard.   I  was  quite 
disappointed  that  they  wouldn't  let  me  in,  and  I  thought  it  was 
pretty  stuffy  of  them.  Anyway,  I  did  come  back  to  Boalt,  and  I  only 
stayed  two  years  at  Oxford.   So  instead  of  doing  all  this  reading  in 
the  vacation  periods,  I  saw  the  world,  deliberately. 

But  even  so,  I  had  the  experience  during  the  school  term  of 
going  to  this  tutor  and  having  him  recommend  reading  to  me,  and  then 
having  to  converse  with  him  about  what  I'd  read,  or  even  give  him, 
say,  a  written  paper.  The  papers  weren't  in  the  area  of  questions 
like,  "In  what  year  did  William  the  Conqueror  fight  the  Battle  of 
Hastings?"  They  weren't  like  that;  they  were  thematic  questions, 
basic  principle  questions,  philosophical  questions  or  answers,  so 
that  you  were  taught  really  to  educate  yourself,  and  taught  how  to 
do  it  with  guidance. 

Another  point  is  you  were  not  given  an  examination  in  a  course 
at  Oxford.   They  have  no  examinations  in  each  course;  you're  exam 
ined  for  a  degree.   Now  the  English  undergraduates  spend  three  years 
instead  of  our  four,  and  at  the  end  of  the  third  year,  and  only  at 
the  end  of  three  years,  if  you're  going  to  take  a  Bachelor  of  Arts 
degree,  you're  given  an  examination.   So  you've  got  to  perform  on 
the  basis  of  the  last  three  years.   Obviously,  unless  you've  got  a 
phenomenal  memory,  there's  none  of  this  cramming  business  that  a  lot 
of  our  kids  do  in  remembering  a  lot  of  dates  and  places  and  so 
forth.   You  can't  do  that  over  a  three-year  period.   You  can't  even 
do  it  over  a  two-year  period.   I  think  that  has  influenced  me  and 
anybody  who  goes  through  that  process. 

Another  point  of  difference  is  that  in  England,  the  law  is 
taught  not  out  of  a  case  book,  but  out  of  a  textbook.   Do  you  know 
the  difference? 

Hicke:    Perhaps  you  could  explain. 

McBaine:   Let's  take  a  textbook  on  torts.   It's  a  book  written  by  a  professor 
of  tort  law,  and  it  discusses  the  different  subjects  of  torts,  the 
different  aspects  of  torts,  different  kinds  of  torts  that  may  occur, 
and  what  the  law  is  on  them.   It  may  have  on  each  page  footnotes 
where  it  cites  cases  that  substantiate  what  the  author  says  in  the 
text,  but  you're  studying  from  a  text. 

In  an  American  law  school,  they  don't  do  that  for  you.   You're 
given  that  case  that's  in  the  footnote,  and  you're  given  excerpts 
from  the  opinion  or  opinions  in  the  case,  and  you  have  to  read  those 
and  decide  for  yourself  what  the  significance  is  of  what  the  court 
said. 

Hicke:    So  you  more  or  less  write  the  text  part  yourself. 


25 

McBaine:  That's  right.  That's  a  very  laborious  method  of  teaching.  This  was 
originally  started  by,  I  think  it  was  Dean  Langdell  at  the  Harvard 
Law  School,  and  was  adopted  by  virtually  all  American  law  schools. 
There's  some  agitation  now  to  get  away  from  it,  because  it's  slow 
and  it's  laborious,  but  after  all,  basically  that's  what  you  have  to 
do  when  you  start  practicing  law.  The  idea  of  the  American  law 
school  is  to  train  the  student  to  do  what  he's  going  to  have  to  do, 
certainly  as  a  younger  lawyer.   The  way  it  is  now,  if  you're  a  sole 
practitioner,  you're  going  to  have  to  do  it  the  rest  of  your  life. 
For  that  reason,  I  intended  to  come  back  to  this  country  and  at 
least  go  through  that  process  for  one  year  here. 

When  I  got  back,  the  law  school  at  Berkeley  accepted  me  and 
gave  me  credits  which,  in  effect,  amounted  to  a  year  and  a  half's 
credits  for  the  work  I'd  done  at  Oxford,  but  not  two  years.   Instead 
of  staying  a  year  and  a  half  at  Boalt  Hall,  I  stayed  two  years  to 
avoid  breaking  one  year  up.   It  didn't  seem  there  was  much  point  in 
doing  that,  and  besides,  that  was  1934,  and  things  weren't  economi 
cally  so  hot  in  '34.   Perhaps  my  father's  advice  was  based  partly  on 
that.   But  I  did  stay  for  two  years. 

Another  important  thing  about  Oxford  was  the  people  that  I  met 
there.   I  mentioned  to  you  the  other  day  that  Dean  Rusk  was  a  con 
temporary  of  mine  at  Oxford,  and  a  good  friend  of  mine.   He  remained 
a  friend  of  mine,  and  he  still  is,  although  I  haven't  seen  him  in  a 
number  of  years.   There  were  a  number  of  people  there  that  I  knew 
who  came  into  my  life  later,  not  many  of  them  in  any  important 
matter,  but  Dean  Rusk  did.   He  came  into  my  life  in  a  very  important 
way  later  on  when  he  was  assistant  secretary  of  state. 

Another  great  influence  --  I  don't  know  whether  everyone  would 
call  it  an  advantage,  but  I  do;  anyway,  an  influence  --  were  the 
weeks  in  between  term  time.   Fortunately,  my  family  gave  me  a  little 
extra  money,  it  wasn't  very  much,  but  it  didn't  need  to  be  very 
much.   The  Rhodes  scholarship  stipend,  in  those  days,  while  it  was  a 
generous  stipend  as  scholarships  go,  and  enough  to  maintain  one 
throughout  the  year,  it  didn't  really  allow  much  extra  for  trav 
eling,  even  third  class,  staying  in  pensions,  and  so  forth.   But 
with  about,  as  I  remember  it,  maybe  a  thousand  dollars  a  year  extra, 
I  was  able  to  go  everyplace  I  wanted.   I  deliberately  took  full 
advantage  of  it,  knowing,  as  I  say,  I  intended  to  come  back  here  to 
finish  law  school  before  I  started  practicing  law.   That  was  my 
first  real  experience  with  the  world  at  large,  other  than  these 
R.O.T.C.  cruises. 

I  believe  that  my  first  Christmas  vacation  would  have  been  the 

winter  of  1932.   I  went  to  Florence  with  some  friends  from  Oxford, 

and  I  was  going  to  meet  a  couple  of  others  there,  and  I  had  a  cousin 
who  was  going  to  be  there  at  that  time. 

To  tell  you  the  truth,  I  don't  even  remember  if  the  University 
of  Missouri  had  a  fine  arts  museum  or  not;  if  it  did,  I  don't 
remember  it.   And  I  don't  think  the  University  of  California  had 


Hicke: 


McBaine: 


26 

one.   And  I  don't  believe  I'd  ever  been  in  any  one  of  the  museums  in 
San  Francisco.   I  don't  know  what  your  own  experience  has  been  of 
this  thing,  but  to  go  from  that  kind  of  absolutely  unsullied  back 
ground  and  be  plunked  down  in  the  middle  of  Florence  for  six  weeks 
was  staggering.   It  was  like  a  bomb  blast,  and  it  still  staggers  me 
when  I  think  that  a  city  of  25,000  people,  which  it  was  roughly  in 
its  heyday,  could  produce  the  fantastic  works  of  art  that  they  did 
produce.   I  think  that's  got  to  be  one  of  the  most  dramatic  stories 
in  all  of  history. 

I  guess  I  was  there  for  five  weeks.  Then  I  went  down  to  Rome 
for  one  week,  and  there  I  stayed  in  a  pension.  When  I  arrived  in 
this  pension,  I  said  I  was  from  San  Francisco,  and  the  woman  who  ran 
it  said  to  me,  "Well,  your  brother  is  already  here,"  and  I  said,  "I 
don't  have  a  brother."  She  said,  "Oh,  yes,"  and  she  looked  know 
ingly.   Anyway,  at  dinner  that  night  I  was  at  a  table,  and  there  was 
another  redheaded  fellow  sitting  across  the  table  from  me.   It 
turned  out  to  be  Paul  C.  Smith.   I  don't  know  if  you  ever  knew  Paul 
Smith.   He  was  the  boy  wonder  editor  of  the  Chronicle  for  many 
years.   It's  a  long  story,  but  he  was  a  most  extraordinary  person, 
had  a  fabulous  career,  and  was  a  lifelong  friend  of  mine.   So  he  and 
I  sat  on  the  Pincian  Hill  and  discussed  Mussolini  and  philosophized 
about  everything. 

But  that's  an  example  of  the  kind  of  thing  that,  had  I  simply 
gone  to  the  country  and  holed  up  with  a  lot  of  books  someplace,  I 
never  would  have  experienced.   So  I  not  only  don't  regret  it,  my 
plan  was  to  do  that.   Nothing  was  quite  as  dramatic  as  that  first 
time,  but  then,  for  example,  in  the  summertime,  I  went  over  to 
Bruges,  and  I  was  going  to  go  from  there  up  the  Rhein  and  down  the 
Danube  to  Vienna  and  Budapest.   I  got  as  far  as  Munich,  and  I  never 
left;  I  spent  about  two  and  a  half  months  in  Munich.   I  think  as  far 
as  fun  is  concerned,  I  probably  had  more  fun  that  summer  than  any 
summer  of  my  life.   It  was  just  absolutely  great. 

During  the  course  of  that  time  I  learned  to  speak  German 
fluently.   I  spoke  it  all  day  long,  merely  from  living  in  a  pension 
where  no  English  was  spoken.   The  woman  who  ran  it  didn't  speak  Eng 
lish.  There  was  a  common  table,  and  if  you  wanted  a  piece  of  bread, 
you  had  to  learn  the  word  to  get  a  piece  of  bread,  or  a  glass  of 
water,  or  whatever  it  was.   I  couldn't  read  a  newspaper  or  the 
books,  because  they  were  all  in  Gothic  script  in  those  days,  and 
that  Gothic  script  is  very  hard  to  read.   Do  you  read  German? 

I  have  studied  German,  but  you're  right,  the  F's  and  the  S's  are 
different. 

It's  very  confusing;  it  destroys  your  concentration  completely. 
You're  so  busy  trying  to  figure  out  what  the  thing  is  that  you 
almost  miss  the  meaning  of  the  sentence,  much  less  the  thought. 


Hicke:    It's  hard  enough  to  translate  without  having  to  read  script. 


27 

McBaine:  That's  right.   So  I  never  bothered  with  that,  and  I  didn't  bother 

with  the  grammar,  so  I'm  sure  I  would  offend  any  German  purists  with 
my  subject  and  verb  and  object.   I  followed  the  English  progression. 
But  that  was  the  summer  that  Hitler  became  chancellor.   So  as  a 
result,  among  other  things,  I  bought  and  read  when  I  returned  to 
England  Mein  Kampf  ,  which  I  still  have,  which  I  think  is,  without 
question,  one  of  the  most  significant  books  ever  written. 

Hicke:    Not  nearly  enough  people  read  it. 

McBaine:   No.   Of  course,  history  has  seen  to  it  that  it  hasn't  had  the  impor 
tance  of  Das  Kapital  ,  but  I  think  it's  comparable  in  a  sense. 
People  should  have  read  it  and  paid  attention  to  it.   Of  course,  Das 
Kapital  was  in  existence  for  quite  a  long  time  before  anybody  paid 
much  attention  to  that,  and  then  I'm  inclined  to  think  the  only 
reason  people  paid  attention  to  it  --  I  don't  know  whether  it  was 
Lenin  or  some  of  his  scribes  --  was  because  they  saw  in  it  a  way  to 
pervert  it  and  create  a  ruling  clique  that  is  more  solidly 
entrenched  than  any  divine  monarch  ever  was  in  the  Middle  Ages. 
Plenty  of  kings  were  overthrown  despite  their  divine  rights. 
Nobody's  figured  out  how  to  get  rid  of  a  communist  hierarchy  yet. 

In  any  case,  we  were  pretty  remote  from  it  in  Germany,  but  I 
had  one  interesting  experience.   It  shows  you  how  many  indicators 
there  were  of  what  was  going  on  in  Germany.   We  were  in  a  beer  hall 
in  Munich  one  night,  and  we  had  to  go  to  the  urinal.  We  were  all 
talking  German,  because  we  all  spoke  German  of  various  degrees  of 
proficiency;  I  was  probably  the  least  proficient.   But  somebody 
started  telling  a  dirty  joke,  and  not  to  louse  it  up  in  poor  German, 
we  switched  to  English.   There  were  three  or  four  of  us  standing 
around. 

I  have  to  describe  the  scene  for  you.   In  the  men's  room, 
there's  a  big  sort  of  slate  wall  and  a  pipe  that  runs  along  the  top 
and  the  water  flows  down  like  a  waterfall.   So  we  were  all  standing 
there,  about  three  or  four  in  a  group,  and  telling  this  joke  and 
laughing,  when  all  of  a  sudden,  bam,  some  fellow  in  a  brown  shirt 
and  brown  uniform,  the  Nazi  party  uniform,  hit  us  from  the  rear  and 
pushed  us  all  right  into  the  pissoir.  When  we  turned  around,  here 
was  this  rather  smallish  fellow,  obviously  drunk,  just  as  drunk  as 
he  could  be,  and  he  was  cursing  us  in  German,  and  he  said  something 
like,  "Sombitch,  sombitch,"  [speaks  more  in  German]   "Sie  sind  in 
Deutschland  jetz  und  Sie  Mussen  Deutsch  sprechen." 

Hicke:    "You're  in  Germany,  and  you  have  to  speak  German  now." 

McBaine:   You  have  to  speak  German  now.   He  objected  to  the  fact,  you  see, 
that  we  were  speaking  English. 


McBaine:   One  of  the  boys  in  our  group  drew  back  his  fist  as  if  he  were  going 
to  level  this  guy,  and,  fortunately,  one  of  the  others  of  us,  I 


Hicke: 


McBaine: 


Hicke: 

McBaine: 


28 

don't  remember  who  it  was  now,  whether  it  was  me  or  somebody  else, 
remembered  that  he'd  read  in  the  paper  a  few  days  before  that  Hitler 
had  just  passed  a  law,  issued  a  decree  or  whatever  he  did,  making  it 
a  capital  offense  for  anyone  to  attack,  physically  attack,  a  member 
of  the  Nazi  party  or  the  military  units  of  it  in  uniform.  That  was 
the  first  time  in  history  for  that  law  since  William  the  Conqueror's 
day.  When  William  invaded  England,  he  had  to  make  the  same  sort  of 
a  law:   it  was  a  capital  offense  for  any  Saxon  to  physically  assault 
a  Norman. 

In  any  case,  it  was  supposed  to  be  common  knowledge,  and  we 
knew  that  there  were  several  Americans  in  jail  in  Munich  for  unknown 
offenses.   Fortunately,  one  of  our  number  knew  about  this  and 
grabbed  this  fellow's  arm  and  stopped  him,  so  we  were  sort  of  at  an 
impasse  there,  and  this  storm  trooper  was  still  yelling  obscenities 
at  us . 

All  of  a  sudden  we  heard  a  very  sharp  command  from  behind  us, 
somebody  speaking  in  a  very  sharp  tone.   He  had  a  command  voice, 
I'll  tell  you  that.   He  said  something  in  German,  and  this  brown 
shirt  looked,  and  we  turned  around,  and  here  was,  again,  a  rather 
smallish  man  in  an  impeccably  cut  business  suit,  and  as  I  remember, 
he  had  a  homburg  hat  on.   He  barked  at  this  storm  trooper,  and  the 
man  looked  at  him  for  a  minute,  pulled  himself  up,  and  sort  of  came 
to  attention.  This  fellow  barked  some  more  at  him  in  German,  and 
the  brown  shirt  fellow  said,  "Jawohl,  Ja,  mein  Herr,"  or  something, 
and  off  he  went. 

With  that,  the  newcomer  came  up  to  us,  reached  in  his  pocket, 
took  out  a  wallet,  took  out  a  card,  and  he  said,  "My  apologies.   My 
compatriot  had  had  too  much  to  drink,  as  you  could  see.   I'm  very 
sorry  for  his  behavior,  and  I  must  apologize,"  and  he  handed  us  his 
card.   It  said  whatever  his  name  was,  and  I  don't  remember  if  there 
was  a  "von"  in  it  or  not,  but  quite  likely  there  was.   But  anyway, 
down  at  the  bottom  it  said,  "Privat  Heim  Vehr." 

Private? 

Yes,  private,  German  army.   Now  that  man  was  no  more  a  private  than 
Douglas  MacArthur  was.  The  significance  of  that  story  is  that  the 
German  army,  under  the  Treaty  of  Versailles,  was  limited  to  100,000 
men.   Obviously  any  ordinary  army  has  got  a  couple  of  generals,  and 
then  more  of  each  rank  as  you  go  down  the  ranks,  and  the  great  mass 
of  them  are  common  soldiers.   And  here  was  this  fellow  who  was  obvi 
ously  an  aristocrat  and  obviously  a  high-ranking  person,  and  he  was 
a  private  in  the  army.   So  what  they  had  was  a  100,000-man  officer 
corps.  And  that  was  in  1933,  I  guess  it  was. 

That  was  quite  an  experience. 

But  nobody  paid  any  attention  to  it,  particularly  the  English. 


29 

That  reminds  me  of  another  story  I  didn't  tell  you  about 
Oxford.   I  was  a  member  of  the  Oxford  Union  when  I  was  at  Oxford, 
and  that's  the  debating  society.   The  Oxford  Union  is  physically 
built  in  the  style  of  the  House  of  Commons  in  the  Parliament,  and 
indeed  the  House  of  Lords  is  set  up  the  same  way,  with  a  longish 
hall  with  opposing  parties  sitting  on  opposite  sides,  the  speaker  at 
one  end  and  a  table  with  a  dispatch  box  in  the  center.   The  speakers 
come  to  that  table  on  either  side,  left  or  right,  and  speak,  instead 
of  going  to  one  central  place  as  they  do  in  Congress. 

That  particular  year  --  I  don't  remember  whether  this  was  '32 
or  '33  now  --a  motion  came  up  for  debate  in  the  Oxford  Union,  and 
the  motion  was:   "Resolved:   this  House  will  not  fight  for  King  nor 
Country."  Students  take  their  national  politics  very  seriously 
there.   I  think  there's  something  like  a  dozen  prime  ministers  who 
have  come  from  Oxford,  and  every  one,  I  believe,  from  the  Oxford 
Union.   The  Labor  Party  was  solidly  in  control  of  the  Union  at  that 
time,  the  Conservatives  were  way,  way  out,  so  that  when  the  House 
adopted  this  resolution,  some  historians  have  said  that  this  was  one 
of  the  principal  factors  that  led  Hitler  to  do  what  he  did,  because 
he  thought  the  British  would  never  fight  him. 

In  any  case,  when  this  happened  --  and  I  was  there  the  night 
they  adopted  this  resolution  --  it  created  a  sensation  in  the 
British  newspapers  and,  in  fact,  all  over  the  Empire.   I  mean  this 
was  really  a  big  thing  in  European  papers. 

The  first  thing  that  happened  concerned  [Winston  S.] 
Churchill's  son,  Randolph  Churchill,  who  had  been  expelled  from 
Oxford,  or  dropped,  one  might  better  say,  from  Oxford  because  he  had 
failed  at  the  end  of  his  first  year  to  pass  some  examination  which 
was  almost,  as  described  to  me  by  the  English  students,  as  simple 
as,  "What  is  your  name?"  He  got  dropped. 


Randolph  Churchill  proved  in  later  life  to  be  one  of  the  most 
universally  disliked  people  that  ever  came  along  the  pike.   He  had 
all  of  his  old  man's  arrogance  and  overbearing  personality  without 
having  anything  else  to  go  with  it.   But  having  been  thrown  out  of 
the  school,  he  got  a  friend  of  his,  another  young  man  named  Lord 
Stanley  of  Alderley  --  I  can  still  remember  his  name  --  to  join  him, 
and  he  issued  a  challenge  to  the  Oxford  Union  to  debate  another 
motion,  "Resolved:   that  this  House  hereby  rescinds  its  motion  of 
such  and  such  a  date." 

The  date  was  set  for  this  debate  in  two  weeks'  time,  or  what 
ever  it  was,  and  feelings  ran  high.   There  was  a  public  threat 
issued  by  some  group  of  students  that  if  Randolph  Churchill  showed 
up  at  Oxford,  he  would  be  "debagged"  and  thrown  into  a  local  pond. 
"Debagging"  was  the  British  method  of  inflicting  the  most 
humiliation  on  anyone  of  anything  that  could  be  done  --  meaning 
taking  his  trousers  off  and  leaving  him  in  his  shorts. 


Hicke: 
McBaine: 


30 

When  the  time  came,  Randolph  showed  up,  and  he  had  two  body 
guards  with  him:   huge,  great,  hulking  fellows.   The  word  went  out 
in  Oxford  for  all  the  undergraduate  members  of  the  Oxford  Union  to 
be  sure  and  come  early  and  fill  up  the  seats,  because  retired 
colonels  of  the  Indian  Army  were  coming  from  overseas  and  one  thing 
and  another  to  attend  this  debate  and  vote  the  disloyal  motion  down. 

So  the  debate  started.   It  turned  out  to  be  an  absolute  sham 
bles.   The  Oxford  students  listened  to  their  own  speakers,  but  when 
Randolph  and  his  friend  got  up  to  speak,  they  just  went  wild,  and 
somebody  finally  threw  a  stink  bomb.   And  I  want  to  tell  you  it  was 
the  worst  stink  bomb  I  have  ever  smelled  in  all  my  life;  it  just  was 
suffocating.   It  just  stopped  everything  cold.   In  the  middle  of 
this,  some  English  boy  walked  in  the  far  end  of  the  hall,  walked 
right  up  the  middle  aisle  in  between  the  opposing  parties,  walked  up 
to  the  dispatch  box,  and  turned  the  page  back  to  two  weeks  previous 
where  it  said  this  house  would  not  fight  for  king  nor  country, 
ripped  it  out  of  the  book,  and  turned  around  and  started  back  out. 
He  just  walked  at  a  normal  pace,  so  nobody  realized  what  he  was 
doing.   He  was  about  halfway  out  before  anybody  realized  what  he  had 
done.   Then  everybody  jumped  up,  and  he  then  broke  into  a  run,  and 
he  just  scooted  out  the  door  as  hard  as  he  go.   He  rescinded  the 
motion  all  by  himself. 

Then  they  settled  down  and  there  was  an  anticlimax  to  the 
debate,  but  it  didn't  come  to  anything.   Then  a  few  weeks  after 
that  --  and  I  don't  know  whether  this  was  already  tabled,  already 
arranged,  because  the  Oxford  Union  customarily  quite  often  invites 
outside  speakers,  and  they  invite  prominent  politicians  to  come, 
ministers  of  the  cabinet,  quite  often,  and  they  come.   Whether  it 
was  coincidence  or  whether  somebody  did  this  deliberately,  I  don't 
know,  but  anyway,  the  notices  went  up  that  Winston  Churchill  was 
appearing  in  another  two  weeks'  time.   Did  you  read  The  Last  Lion? 

No. 

It's  a  fascinating  book.   If  you're  interested  in  how  England  used 
to  be  run,  you  should  read  that  book.   I  don't  think  I've  ever  read 
a  book  that  gives  a  better  picture  of  how  England  was  run  until 
recent  years.   It's  the  life  of  young  [Winston]  Churchill. 

In  that  period,  he  was  the  most  reviled  politician  in  all  of 
England.   He  was  considered  a  raving  jingoist,  and  nobody  had  a  good 
word  to  say  for  him.   He  may  have  had  a  half  dozen  close  friends, 
but  that's  about  all.  He  was  terribly  unpopular,  but  he  was  coming 
up  to  Oxford.  When  he  arrived,  he  brought  Randolph,  his  son,  with 
him,  saying  in  effect,  "To  hell  with  all  you  people." 

The  Oxford  Union  Board,  the  student  officers  and  governors, 
gave  a  dinner  before  each  debate,  and  the  officers  and  the  principal 
debaters  attended  the  dinner.   In  my  day,  it  was  always  white  tie. 
Churchill  showed  up  with  Randolph  and  took  him  to  dinner.   They'd 
just  run  him  out  of  town  about  two  weeks  previously,  and  the  old  man 


31 

just  shoved  this  young  man  --  he  really  was  a  youngster  --  down 
their  throats. 

I  don't  know  what  the  debate  subject  was,  but  the  subject  was 
nothing  significant.  That  didn't  really  make  any  difference, 
because  in  the  Oxford  debates,  the  principal's  speeches  were  fifteen 
minutes  long  --  they  were  then,  at  any  rate  --  and  for  the  first  ten 
or  maybe  even  twelve  minutes,  the  idea  was  to  put  on  a  show  of 
verbal  pyrotechnics.   It  didn't  make  any  difference  what  you  talked 
about,  it's  how  eloquent  you  were,  and  how  witty  you  were.   The  idea 
is  to  show  off.   Then  the  last  two  and  a  half  to  three  minutes,  you 
could  talk  about  the  subject.  That  was  the  usual  format. 

So  Churchill  got  up  and  he  started  off,  with,  as  I  say,  this 
background  of  animosity  of  all  these  students,  and  the  hall  packed 
by  the  people  who  had  voted  not  to  fight  for  king  nor  country, 
whereas  he  was  a  man,  the  chief  jingoist  in  the  country,  who  wanted 
to  fight  everybody.   He  started  out  as  if  he  were  utterly  bored  by 
the  whole  proceedings,  and  let  out  some  banal  phrase  of  some  kind  or 
another,  I  don't  remember  what  it  was,  but  it  was  something  like 
that  selected  by  the  professor  who  gives  a  prize  of  the  worst 
opening  sentence  in  literature. 

Hicke:    "it  was  a  dark  and  stormy  night"? 

McBaine:   Yes.   Churchill  said  something  like  "this  dear  old  England  of  ours 
where  every  mother's  son's  heart  beats  for  dear  old  Britain,"  some 
thing  like  this.  There  was  sort  of  a  low  groan  that  came  out  of  the 
audience.   For  the  first  time,  he  showed  some  interest  in  the  pro 
ceedings,  and  he  raised  his  head  a  little  bit.   He  looked  around, 
and  he  said,  "I  said  this  dear,  emerald  isle  of  ours  where  every 
mother's  son's  heart  beats  for  dear  old  England,"  and  everybody 
went,  "Boo,  boo."  By  this  time  he  was  standing  erect,  and  he  said, 
"I  said  this  dear,  emerald  isle  of  ours,"  and  he  went  on  through  the 
same  thing  again,  and  this  time  they  stomped  their  feet  and  whistled 
and  jeered  and  everything  else.   And  he  repeated  the  same  banal 
phrase  three  or  four  times  more  --at  the  end  of  which  the  whole 
house  rose  and  cheered!   He  just  took  that  same  corny  phrase  and 
rammed  it  down  their  throats,  psychologically  took  them  by  the 
scruff  of  their  necks  and  shook  them,  until  they  cheered  his 
bull-dog  tenacity.   It  was  the  damndest  performance  I  have  ever  seen 
in  human  communications. 

Hicke:    That's  a  good  note  to  end  on  for  today,  I  guess. 


32 


Law  School  at  Boalt  Hall 


[Interview  continued:   April  29,  1986 ]## 


Hicke:    Last  time,  I  think  we  left  off  when  you  were  studying  at  Oxford. 
Maybe  we  can  start  this  afternoon  with  what  happened  after  that. 

McBaine:   I  took  an  A.B.  in  Jurisprudence  at  Oxford  in  1934.   I  "came  down," 
as  they  say  rather  than  "graduated,"  that  year,  and  returned  to 
California. 

As  I  mentioned  before,  I  had  always  intended  to  go  to  the  Har 
vard  Law  School,  which  was  the  preeminent  law  school  in  the  United 
States  at  that  time,  and  indeed,  may  well  still  be.   But  Harvard  had 
a  policy  in  those  days  of  not  giving  anyone  any  credit  for  any  legal 
education  taken  elsewhere.   So  I  returned  to  Berkeley  and  received 
about  a  year  and  a  half's  credit  at  Boalt  Hall,  the  law  school  at 
Berkeley,  for  the  work  that  I'd  done  in  England,  which  actually 
didn't  save  me  any  time,  because  I  decided  to  do  the  last  two  years 
at  Boalt  Hall.   But  it  gave  me  the  ability  to  pick  and  choose  among 
the  various  courses  as  I  wanted,  and  altogether  was  of  some  aid  to 
me. 

My  father  was  then  on  the  faculty.   He  taught  Common  Law  Proce 
dure  to  first  year  students,  and  Evidence  to  third  year  students. 
I'd  had  no  course  in  Evidence,  so  I  did  have  him  for  one  of  my 
courses . 


Hicke:    What  was  that  like? 

McBaine:   In  retrospect,  I  think  I  was  a  bit  of  a  smart  aleck,  and  I  may  have 
had  a  better  time  than  my  father  did.   My  father  was  really  a  mar 
velous  teacher.   I  say  that  not  because  that's  my  opinion,  but  that 
was  general  opinion.   He  was  preeminent  really  among  all  the 
teachers  in  Boalt  Hall  in  his  popularity  with  the  students.   He  was 
a  great  teacher  rather  than  being  simply  a  scholar. 

At  Oxford,  I  had  met  many  world-renowned  scholars,  and  there 
was  hardly  an  inspiring  teacher  among  them.   It  was  a  purely  intel 
lectual  process  with  most  of  them.   For  example,  Holdsworth,  the 
greatest  authority  on  English  legal  history,  was  without  doubt  the 
driest  and  dullest  lecturer  I've  ever  heard  in  my  whole  life. 

On  the  contrary,  my  father  was  a  very  stimulating  teacher,  and 
I  enjoyed  him  immensely.   I  can  remember  that  I  took  a  seat  in  the 
front  row.   I'm  not  sure  at  this  late  date  about  my  feelings,  but  at 
any  rate,  I  had  the  idea  that  I  wanted  to  enjoy  him,  but  I  also  had 
the  idea  that  I  enjoyed  debating  with  him,  arguing  with  him  about 
legal  points,  so  I  sort  of  waded  in  and  had  a  thoroughly  good  time. 
But,  in  retrospect,  it  began  to  occur  to  me  as  I  got  older  that 
maybe  my  father  hadn't  enjoyed  it  as  much  as  I  did.   He  was  exposed 
because  he  had  to  stand  up  and  lecture.   Except  when  called  on,  I 
had  the  option  of  interjecting  or  keeping  quiet. 


33 

In  any  case,  I  enjoyed  the  class  thoroughly,  and  often  wonder, 
in  retrospect,  how  much  he  enjoyed  it.   In  those  days  --  they  still 
are  --  the  papers  were  anonymous;  no  names  were  on  them.   I  don't 
know  whether  he  could  recognize  my  handwriting  if  he  read  my  exami 
nation  papers,  or  whether  he  assigned  it  to  someone  else.   I 
wouldn't  be  the  least  bit  surprised  if  he  assigned  my  papers  to 
someone  else  because  he  must  have  recognized  my  handwriting.   He 
never  told  me  this,  but  it  would  be  completely  like  him  if  he  had. 

Boalt  Hall  had  what  I  thought  then  and  still  think  now  was  an 
outstanding  faculty  at  the  time.   One  of  the  outstanding  teachers 
that  I  had  there  was  Roger  Traynor,  who  was  the  professor  of  taxa 
tion  at  that  time.   And  Traynor,  of  course,  subsequently  became  the 
chief  justice  of  the  Supreme  Court  of  California  and  led  the  Supreme 
Court  of  California  to  unparalleled  stature  in  the  eyes  of  the 
public  at  large.   It  was  widely  considered  the  outstanding  state 
supreme  court  in  the  United  States  at  that  time. 

Traynor  was  a  brilliant  man.   He  was  a  teacher  of  the  old 
school.   His  theory  was  to  challenge  his  students.   By  that  I  mean 
he  was  rough  in  class.   He  would  ask  the  most  difficult  possible 
questions,  and  simply  heap  scorn,  almost  ridicule,  on  anybody  that 
didn't  reply  adequately.   I  remember  he  used  to  make  me  so  mad,  as 
he  did  a  lot  of  others,  that  I  would  leave  class  and  go  and  work 
like  hell  in  an  effort  to  prepare  myself  so  I  could  turn  the  tables 
on  him  the  next  time  we  met. 


Hicke:    And  did  you? 

McBaine:   I  doubt  it.   Later  I  learned  from  him,  indeed,  that  this  was  a  tech 
nique,  that  he  really  was  not  as  irascible  as  that  by  nature.   But 
he  adopted  the  technique,  which  was  widespread  among  top  law  profes 
sors,  particularly  noted  at  Harvard  Law  School,  as  a  method  of  get 
ting  the  best  out  of  your  students. 

Hicke:    Was  he  a  trial  lawyer? 

McBaine:   No,  he  was  a  teacher  of  law;  as  far  as  I  know,  he  never  practiced, 
no. 

Hicke:    So  this  was  his  teaching  method? 

McBaine:   This  was  his  teaching  method.   Of  course,  that's  very  seldom  done  in 
undergraduate  work.   It's  often  done  in  first  year  English  courses. 
I  don't  know  your  experience,  but  it  seems  to  me  that  I've  had  the 
experience  myself,  and  observed  generally  that  first-year  English 
teachers  are  there  to  sort  of  awaken  the  minds  of  the  naive  young 
high  school  students,  introduce  them  to  the  wider  world  of  ideas  and 
clash  of  ideas.   That's  part  of  freshman  English,  I  think,  at  least 
it  was  at  Berkeley,  and  others  have  said  the  same  thing. 

In  law  school,  they  take  this  a  step  further.   There's  no  cod 
dling  done,  on  the  theory  that  if  you  become  a  practicing  lawyer, 


McBaine: 


Hicke: 


McBaine: 


34 

you've  got  somebody  on  the  other  side  that's-,  of  course,  trying  to 
show  your  arguments  up  as  fallacious,  and  you've  got  a  judge  who's 
listening  to  the  whole  thing,  who  is  impatient  with  useless 
material,  unpersuasive  arguments.   So  if  you  get  used  to  combatting 
your  professor,  that's  the  kind  of  training  you  need  for  mature 
practice  as  a  lawyer. 

In  retrospect,  as  I  say,  I  look  back  on  it  with  great  pleasure, 
because  he  certainly  was  an  effective  teacher,  and  he  did  make 
everybody  I  knew,  at  any  rate,  work  their  heads  off  for  him,  not 
just  for  love  of  the  subject,  but  in  order  to  try  to  stand  up  to  him 
or  try  to  get  the  better  of  him  if  possible. 


Hicke:    He  probably  didn't  win  any  popularity  contests? 


No,  he  didn't,  but  he  won  an  awful  lot  of  respect, 
lot  of  well-prepared  students,  I'll  say  that. 


He  turned  out  a 


Hicke: 


There  were  many  other  outstanding  teachers  there  at  that  time. 
One  of  the  most  outstanding  was  Max  Radin,  who  was  a  professor  of 
Legal  History  and  Roman  Law,  also  an  outstanding  academic  and  a  most 
colorful  man.   While  I  knew  him  well  personally  because  of  my 
father's  acquaintanceship  with  him,  I  didn't  take  any  courses  from 
him,  because  I  was  heavy  on  Legal  History  and  Roman  Law  from  my 
Oxford  years. 

Another  thing  that  I  was  heavy  on  because  of  my  Oxford  work  was 
Jurisprudence,  which  is  a  study  of  the  science  of  the  law  and  dif 
ferent  systems  of  law  that  different  peoples  have  evolved.   English 
writers  have  done  a  great  deal  on  that,  particularly  from  the  clas 
sical  side,  the  development  of  law  in  the  Roman  Empire,  and  others 
even  more  primitive,  and  then  later  places. 

I  did  not  take  any  further  Jurisprudence  courses.   I  took  the 
more  or  less  bread-and-butter  courses,  like  Criminal  Law,  Evidence, 
Procedure,  various  practical  courses;  indeed,  that's  the  reason  I 
came  back  and  went  to  law  school  here:   to  prepare  myself  for  the 
actual  practice  of  law  in  California  courts. 

Did  you  have  any  idea  of  specializing,  or  was  it  pretty  much  the 
case  that  everybody  did  everything  to  start  off  with  anyway? 

No.   I  can't  be  sure  what  the  curriculum  in  the  law  schools,  in  the 
typical  law  school,  is  today,  but  in  those  days,  the  idea  was  to 
cover  the  field  of  the  law  in  general.   There  were  a  few  very  spe 
cialized  topics,  such  as  future  interests,  which  many  people  took, 
and  which  was  so  abstruse  that  you  might  practice  a  whole  lifetime 
and  never  really  have  a  future  interest  problem  unless  you  became  a 
real  estate  specialist. 

It  had  to  do  with  interest  on  money,  that  kind  of  interest? 


35 


McBaine: 


Hicke: 

McBaine: 


Hicke: 
McBaine 


Hicke: 


McBaine ; 


Hicke: 
McBaine: 


No.   It  had  to  do  with  interest  in  properties,  deferred  interest  in 
properties,  future  interests,  plural.   But  it  was  a  little  like 
taking  Greek  in  a  secondary  school  or  college.   It  was  intellectu 
ally  the  most  difficult  course  in  the  curriculum,  and  it  was  a  damn  - 
good  exercise  for  your  brain  --  not  the  most  popular  course  there. 
I  took  it  because  I  had  extra  credits,  and  I  took  it  partly  because 
the  professor  who  was  teaching  it  was  one  of  my  father's  best 
friends  in  the  law  school  and  a  man  whom  I  liked  very  much. 

Who  was  that? 

Steven  Langmaid,  his  name  was.   You  ask  here  [looking  at  outline] 
about  people  I  remember.   I  don't  want  to  run  through  the  roster  of 
the  faculty,  but,  both  because  of  my  being  the  son  of  a  professor 
there  and  my  two  years  there  in  the  school,  I  knew  them  all,  really. 
They  were  very  good.  In  1934  to  '36,  I  had  a  female  professor  of 
Family  Law,  who  was  one  of  the  first  in  the  United  States  at  a  major 
law  school.   Her  name  was  Barbara  Armstrong.   She  was  an  excellent 
teacher,  first  class  teacher. 

Mr.  Bates  was  telling  me  he  had  her. 

She  had  a  very  good  mind,  an  outstanding  woman,  and  also  a  no- 
nonsense  teacher.   She  didn't  coddle  people;  nobody  in  the  faculty 
did  in  those  days.   There  wasn't  much  student  revolt  going  on  in 
those  days,  especially  in  the  law  school.   It  was  a  very  pleasant 
time.   Relaxation  was  pitching  pennies.  The  students  would  all  do 
that  when  they  had  an  extra  few  minutes  of  time  in  between  classes. 
Normally  you  went  to  the  library  or  someplace  and  did  your  homework, 
but  if  you  needed  a  few  minutes'  break  and  went  out  for  some  sun 
shine  or  something,  the  prevailing  game  was  to  pitch  pennies  against 
the  steps  of  Boalt  Hall,  and  whoever  pitched  the  penny  the  closest 
won  the  other  pennies. 


That  does  bring  up  another  point  that  I  wanted  to  ask  about, 
was  in  the  midst  of  the  Depression. 


This 


Yes,  it  was.   The  Depression  was,  as  best  I  can  say,  simply  unknown 
to  me.   We  read  about  it  in  the  newspapers,  but  it  was  not  a  part  of 
the  daily  life.   I'm  sure  there  were  students  there  whose  fathers 
maybe  went  bankrupt  and  the  boy  or  girl  had  to  drop  out  of  school, 
but  I  wasn't  conscious  of  that.   Of  course,  Berkeley  is  not  a  big 
city,  and  people  were  not  jumping  out  of  skyscrapers;  there  weren't 
any  skyscrapers.   And  generally  speaking,  most  of  them  that  I  knew 
were  about  like  my  family:   not  wealthy,  not  broke. 

So  it  was  a  fairly  normal  time  for  you? 

Yes,  it  was  fairly  normal.   And  we  weren't  worried  too  much  at  that 
time  about  jobs,  because  by  the  time  we  finished  school,  by  '36, 
things  had  started  to  turn  up.   I  don't  remember  exactly  how  my 
class  did.   I've  never  seen  any  figures  as  to  whether  everybody  got 
jobs  or  what  they  did,  but  I  think  it  was  fairly  normal. 


36 
Hicke:    You  said  you  worked  on  the  Law  Review? 

McBaine:   Yes.  The  Law  Review  staff  in  those  days  was  selected  solely  on  the 
grounds  of  class  standing,  academic  standing.   I  read  now  that  Law 
Review  in  some  schools  is  on  a  voluntary  basis,  as  I  understand  it, 
but  this  is  all  brand-new  to  me. 

People  competed  for  grades  in  those  days,  and  again,  I  wasn't 
conscious  of  any  traumatic  effects  of  that  among  the  student  body. 
They'd  all  been  brought  up  that  way.   It  had  been  A,  B,  C,  D,  E,  F 
grades  from  grade  school  on;  again,  I  suppose  there  were  cases  where 
pressure  was  too  great  for  some  people,  but  all  the  way  through  col 
lege  and  all  the  way  through  law  school  at  the  University  of 
California,  I  was  never  conscious  of  that.   I  don't  remember  any 
cases  of  people  that  had  psychological  difficulties  or  anything  like 
that  because  of  the  competitive  pressure. 

Hicke:    It  was  an  accepted  way  of  life. 

McBaine:   It  was  an  accepted  way  of  life,  that's  right.   People  would  have 

been  amazed  at  any  other  way.   Obviously,  that's  left  a  residue  with 
me.   I  just  can't  really  imagine  a  first  class  law  school  having  a 
voluntary  Law  Review  staff,  because  I  have  no  idea  of  the  quality  of 
the  stuff  they'd  put  out. 

Now  the  procedure,  if  you  were  on  the  Law  Review,  was  that  you 
were  assigned  whatever  it  might  be:   either  a  note,  which  was  the 
briefest  sort  of  exposition,  or  a  comment,  which  was  maybe  a  two-  or 
three-page  article,  and  then  there  were  lead  articles.   Most  of  the 
lead  articles  were  written  by  either  graduate  students  or  profes 
sors,  mostly  by  professors.   I  don't  think  there  were  any  lead  arti 
cles  written  by  students  during  the  time  I  was  there;  they  were  all 
notes  or  comments . 

The  student  was  assigned  by  the  editor,  who,  I  suppose,  got 
suggestions  from  the  faculty  advisor.  There  was  a  faculty  advisor 
to  the  Law  Review.   And  important  current  questions  of  law  were  sug 
gested  by  the  faculty  advisor  to  the  editor,  and  the  editor  would 
assign  a  note  or  a  comment,  often  on  a  recent  case  on  some  important 
principle  of  law,  to  the  student  member  of  the  Law  Review,  and  that 
member  would  prepare  this  note,  and  he  had  to  get  it  by  the  pro 
fessor  whose  subject  it  was.   If  it  was  on  taxation,  for  example, 
you  had  to  get  approval  from  Roger  Traynor  before  the  editor  of  Law 
Review  would  accept  your  note  or  your  comment.   I  want  to  tell  you 
that  was  some  job. 

Hicke:    It  was  not  an  automatic  rubber  stamp? 

McBaine:   It  was  anything  but.  And  that  was  true  of  all  the  other  professors, 
too.   You  really  had  to  do  a  complete,  masterful  job,  and  you  had  to 
know  and  have  disposed  of  one  way  or  the  other  --  either  in  a  foot 
note  or  in  some  explanation  of  why  you'd  not  included  it  in  the 
footnote  --  every  case  that  really  bore  on  the  subject  you  were 


37 

writing  about.   It  was  an  exhaustive  procedure,  so  that,  among  other 
things,  it  taught  how  to  research  the  law  exactly  the  same  as  if  you 
had  a  case  in  the  Supreme  Court  of  California  or  the  Supreme  Court 
of  the  United  States.  You  had  to  go  and  research  the  law  and  then 
write  a  brief.   It  was  marvelous  training.  One  of  the  reasons,  I 
think,  it  was  based  on  academic  standing  was  that  those  students 
could  afford  to  put  in  the  extra  time,  which  was  really  very  sub 
stantial,  to  preparing  these  notes  and  comments,  whereas  a  student 
who  wasn't  doing  all  that  well  in  his  or  her  general  classes 
probably  would  suffer  if  he  had  to  spend  all  these  hours  on  this 
extracurricular  work,  so  to  speak. 

Hicke:    How  many  times  were  you  asked  to  do  that? 

McBaine:   I  don't  remember,  but  not  more  than  two  or  three  times  a  year,  I 
think. 

Hicke:    That  would  be  enough. 

McBaine:   That  would  be  enough.   It  was,  again  in  retrospect,  actually  work. 
Mind  you,  American  legal  education  is  arduous.   The  method  is 
arduous,  and  it's  deliberately  so.   It's  much  easier  to  read  a  text 
book  about  contracts  than  it  is  to  have  to  learn  contracts  by 
reading  decided  cases  involving  different  points  of  contract  law. 
And  you  have  to  read  the  case  to  find  out  what  the  point  is  that  was 
decided  in  the  case,  and  how  it  was  decided,  and  then  you  have  to 
read  enough  cases  so  that  you  can  put  those  various  points  together 
to  make  a  cohesive  whole  of  contract  law;  whereas,  if  you  read  a 
textbook  on  contract  law,  which  is  the  process  used  at  Oxford  --  you 
won't  find  the  so-called  casebook  method  --  it's  all  laid  out  for 
you.  But  the  point  is,  at  least  in  the  American  theory,  you  don't 
remember  it  as  well  as  if  you  had  to  dig  it  out  by  reading  the  cases 
and  understanding  the  opinions  of  the  court.   And  furthermore,  when 
you  go  to  practice  law,  you  can't  go  and  read  a  textbook  and  write  a 
brief  from  a  textbook,  because  you  can't  be  certain  that  the  author 
of  the  textbook  is  accurate  in  what  he  says. 

Hicke:    So  it's  really  good  experience  to  dig  through  those  cases,  and  you 

learn  to  get  the  meat  of  a  case,  too,  without  getting  bogged  down  in 
the  details  that  aren't  important. 

McBaine:   That's  correct.   I  question  the  value  of  this  movement  that  I  read 
about  now.   Students  tell  me  they're  bored  in  their  third  year  of 
law  school.   They've  already  had  two  years,  and  that's  enough. 
Frankly,  I  can't  believe  that,  because  the  law  has  expanded  a  great 
deal  since  my  day  in  school.   It  could  be  compressed  so  that  it's 
taught  in  two  years  by  the  textbook  method,  but  you  wouldn't  get 
this  training  that  I'm  talking  about,  that  comes  out  of  doing  all 
this  dirty  work,  doing  all  this  arduous  digging. 

Admittedly,  I  have  an  old-fashioned  point  of  view  on  it,  but  I 
still  think  anybody  who's  lucky  enough  to  be  able  to  afford  it 
should  take  the  three-year  approach,  and  savor  it. 


38 

Most  of  the  people  that  I  know  had  a  good  time  in  law  school. 
There  were  some  who  worked,  but  they  didn't  work  too  much  because 
the  school  work  was  too  difficult.   Among  the  students,  people  I 
remember,  I  would  say  two  of  my  best  friends,  lifelong  friends,  both, 
now  deceased,  were  both  in  law  school  with  me.   Obviously,  you  get 
to  know  your  fellow  students,  at  least  at  Boalt  Hall  in  those  days. 
I  think  the  senior  class  was  probably  fifty,  sixty,  something  like 
that;  it's  bigger  than  that  now. 

And  in  any  law  school,  part  of  the  process  are  the  discussions 
and  arguments  that  go  on  in  the  hallways,  or  outside 'the  study 
rooms,  or  in  the  dormitories,  if  you're  in  a  dormitory,  about  what's 
going  on  in  your  classes.   In  other  words,  the  faculty  itself  is 
only  a  part  of  the  teaching  process.   The  Moot  Court  process  and  the 
Law  Review  process  is  part  of  the  learning  process,  and  the  discus 
sions  with  your  fellow  students  are  part  of  it,  and  a  very  important 
part  of  it.  That's  true  in  all  the  major  law  schools,  and  that's 
why  the  law  schools  which  are  set  up  for  students  who  really  have  to 
work,  not  full-time,  but  for  a  substantial  amount  of  time,  they  lose 
a  lot  of  benefit  out  of  it.   It's  not  that  they  don't  get  the 
instruction,  it's  that  they  don't  have  the  chance  for  this  interac 
tion  with  their  fellow  students  -- 


McBaine:   --  in  debating  what  they've  just  read  in  the  case  material  or  what 
the  professor  has  said. 

Also,  in  those  days,  perhaps  that  discussion  was  more  limited. 
But  neither  the  students  nor  the  professors  were  busy  in  those  days 
discussing  what  the  law  ought  to  be.  What  they  were  discussing  was 
what  the  law  was.   The  curriculum  was  not  thrown  open  to  suggestions 
from  any  and  all  as  to  how  we  ought  to  reform  the  world  and  reform 
society  and  reform  the  law.   There  was  not  much  of  that.   In  the 
jurisprudence  courses,  you  discussed  what  different  systems  of  jur 
isprudence  were,  but  judicial  activism  was  not  really  much  known  in 
those  days.   That  was  not  really  a  part  of  the  process. 

Hicke:    Was  there  any  sense  of  trying,  not  to  change  the  law  but  to  look 

ahead  to  see  which  direction  the  law  was  heading,  since  the  law  is 
changing  all  the  time? 

McBaine:   Yes,  some,  but  that  was  based  on  court  decisions  rather  than  far-out 
writers  of  articles,  and  so  on.   And  the  court  decisions  did  not 
move  all  that  rapidly,  because  the  courts  in  those  days  waited  for 
the  legislature,  by  and  large,  to  make  new  law.   They  were  not 
engaged  in  making  new  law. 

Hicke:    But  interpretations  might  vary. 

McBaine:   Yes,  when  it  was  necessary  to  interpret  the  law  --  not  that  they 

went  reaching  for  it.   So  there's  a  complete  difference  in  point  of 
view  today.   And  I  suspect  that's  one  reason  why  some  of  these  stu- 


39 

dents  say  that  they  think  two  years  is  enough.   If  the  courts  aren't 
going  to  follow  what  the  law  is,  what's  the  use  of  spending  a  lot 
more  time  learning  exactly  what  it  is?  Your  impulse,  then,  is  to 
try  to  guess  what  the  activist  courts  are  going  to  make  it. 

Hicke:    Is  that  somewhat  the  situation  that  we  are  approaching  today? 

McBaine:   From  my  point  of  view  it  is,  but  you'll  hear  a  lot  of  old-timers 
take  that  point  of  view,  I  expect. 

Hicke:    Obviously  you  have  more  to  compare  it  with  than  somebody  who  s  just 
coming  along  in  law  school  today  with  no  historical  perspective. 

McBaine:   Yes.   When  we  were  preparing  an  argument,  a  case,  we  very  seldom  had 
to  worry  about  whether  the  court  was  going  to  make  some  new  law.   It 
doesn't  do  you  a  lot  of  good  to  have  been  to  law  school  and  spent 
two  or  three  years  studying  what  the  law  of  torts  is  and  so  forth, 
if  every  time  you  go  to  court  some  judge  is  going  to  come  out  with 
some  brand-new  rule.   But  if  you  think  that  the  court  is  going  to 
follow  the  law  as  it's  been  laid  down  by  previous  decisions,  which 
is  basically  what  our  system  of  law  is  --  "stare  decisis,"  based  on 
decided  cases  --  then  it's  worthwhile  to  know  in  detail  what  has 
been  decided.   But  this  gets  us  too  far  afield  here. 

Hicke:  It  is  a  little  bit  far  afield,  but  what  you're  saying  is  you  were 
really  standing  on  a  little  firmer  ground  than  perhaps  people  who 
are  coming  through  law  school  right  now. 

McBaine:   That's  right. 

Hicke:  That's  a  good  perspective.  You  were  a  member  of  the  Order  of  the 
Coif? 

McBaine:   Yes,  that  was,  again,  strictly  by  class  standing.   I  don't  remember 
what  it  was,  top  10  percent  of  the  class  or  something  like  that,  but 
it  was  strictly  based  on  grades.   I  guess  I  was  eligible  for  it 
because  I  had  two  years  in  full  at  Boalt  Hall. 


40 


II   EARLY  PROFESSIONAL  EXPERIENCE 


Orrick,  Palmer  &  Dahlquist 


McBaine:   [looking  at  outline]  Learning  to  be  a  lawyer  is  the  next  item  you 
have  here. 

Hicke:    What  I  don't  have  down  there  is  that  you  first  went  to  Orrick, 
Palmer  &  Dahlquist,  is  that  correct? 

McBaine:   Yes.   I  came  to  San  Francisco  when  I  graduated  from  school,  and  the 
first  thing  everybody  did  in  those  days,  in  the  Bay  Area,  at  any 
rate,  was  to  take  a  law  review  course  given  by  Bernie  [Bernard] 
Witkin.   Do  you  know  his  name? 

Hicke:     It's  familiar,  but  can  you  tell  me  a  little  bit  about  him? 

McBaine:   Witkin  was  a  long-time  reporter  for  --  and  really  he  became  chief 
advisor  to  --  the  Supreme  Court  of  California.   In  the  old  days, 
before  law  schools  became  the  accepted  way  for  legal  education,  stu 
dents  of  the  law  read  law  in  some  lawyer's  chambers  or  in  a  judge's 
chambers,  and  then  appeared  before  a  court  and  were  orally  examined 
as  to  whether  they  knew  anything,  and  then  admitted. 

When  the  bar  examinations  became  essentially  as  they  still  are 
today,  various  state  bars  would  administer  these  examinations.   The 
exams  generally  lasted  three  to  sometimes  five  days,  two  three-hour 
exams  a  day,  to  cover  the  entire  three  years  of  work  done  in  law 
school.   Various  teachers  --  would-be  teachers;  they  weren't  for 
mally  teachers  --  decided  that  --  I'm  sure  economic  motivation  was  a 
part  of  it  --  here  was  an  opening  to  give  a  bar  review  course  for 
students  which  would  be  enormously  helpful  to  them,  and  the  good 
ones  were.   There  was  one  in  New  York  by  a  lawyer  who  subsequently 
became  a  federal  judge  there.   And  Bernard  Witkin  is,  despite  his 
absence  of  extended  academic  background,  one  of  the  acknowledged 
experts  on  California  law  in  the  whole  state. 

He's  done  a  marvelous  job  of  being  of  assistance  to  thousands 
and  thousands  of  law  students.   He  taught  this  course  lasting  six 


Hicke: 
McBaine: 


41 

weeks  or  something  like  that  in  the  summertime  after  graduating,  and 
then  you  took  the  bar  examination  in  the  fall.  He  gave  that  for 
many,  many  years,  and  in  fact,  his  books  are  still  over  there  on  my 
shelf.   Someplace  I  have  Witkin  on  California  law,  or  did  I  give  it 
to  someone?  I  don't  see  it.   It  was  an  early  edition;  I  should  have 
kept  it. 

We  all  took  that.   In  the  meantime,  I  went  looking  for  a  job, 
and  I  went  to  various  offices  in  San  Francisco.   I  was  offered  a  job 
in  one  or  two  places.   I  think  the  first  job  I  was  offered  was  at  a 
salary  of  $75  a  month.   I  didn't  think  that  was  as  much  as  I  should 
have  gotten.   I  didn't  settle  for  it,  and  I  looked  further.   I 
finally  wound  up  at  a  firm  then  called  Orrick,  Palmer  &  Dahlquist  -- 
the  Orrick  name  is  still  in  it,  and  it  is  still  in  existence  --  for 
$125  a  month;  that  was  much  better.   That  was  the  highest  I  had 
heard  of  anybody  getting  paid  in  1936  when  I  went  to  work.   It's  a 
far  cry  from  that  today. 

I  worked  at  Orrick,  Palmer  &  Dahlquist  with  Mr.  [William] 
Orrick,  Sr.,  who  was  then  the  senior  partner,  the  head  of  the  firm, 
and  with  the  youngest  partner  in  the  firm,  Hillyer  Brown.   Hillyer 
Brown  later  became  the  vice  president,  legal,  for  the  Standard  Oil 
Company  of  California.   Our  paths  crossed  later  when  I  joined 
Pillsbury,  Madison  &  Sutro  and  found  him  installed  in  that  office. 

Tell  me  about  your  early  training. 

The  associates  of  today  would  think  they  were  on  Mars  had  they  gone 
to  work  in  a  large  law  office  in  1936.   My  work  for  Mr.  Orrick  con 
sisted  of  the  following:   he  would  dictate  and  have  typed  a  memo 
randum  addressed  to  me,  and  the  problem  would  be  stated  in  the  memo 
randum  in  terms  of  John  Doe  and  Richard  Roe,  and  White  Acre  and 
Black  Acre,  and  all  of  these  anonymous  terms  used  to  set  up  a  legal 
question.   I  had  no  idea  who  the  client  was.   I  had  no  idea  where 
this  fit  in  the  larger  picture.   I  would  receive  this  memorandum 
saying,  in  effect,  "Bring  me  a  case  supporting  the  view  that  so  and 
so,"  or  "Bring  me  the  cases,"  perhaps.   I  said,  "Bring  me  a  case," 
because  one  of  Mr.  Orrick 's  principal  theses  was  you  could  find  a 
case  in  the  book  someplace  that  held  any  particular  thing  you  wanted 
on  any  given  question.   I  didn't  believe  it  at  first,  but  he  made  a 
believer  out  of  me. 

That  isn't  to  say  that  that's  going  to  win,  because  it  might  be 
that  some  west  Texas  intermediate  appellate  court  was  the  only  case 
you  could  find,  and  you  could  find  thirty  cases  by  outstanding 
courts  that  held  the  other  way.   But  nevertheless,  the  point  was 
that  with  that  you  went  into  the  library,  and  you  came  up  with  all 
the  various  cases,  and  you  came  up  with  the  cases  that  supported  the 
point  he  wanted  to  make. 

As  I  remember  it,  he  wasn't  much  interested,  if  at  all,  in  the 
cases  holding  the  other  way. 


42 

Hicke:    He  wouldn't  have  to  know  about  those  in  order  to  rebut  them  or  to 
prepare  to  rebut  them? 

McBaine:   I'm  just  giving  you  my  recollection  of  the  earliest  work  that  I  had. 
Hillyer  Brown  was  not  the  same  as  Mr.  Orrick.   Mr.  Orrick  was  a  very 
fine  lawyer,  and  I  enjoyed  working  for  him,  but  he  certainly  taught 
me  the  nuts  and  bolts  of  the  legal  memo  process.   Of  course,  I 
looked  at  the  other  cases  going  the  other  way,  too.  What  he  did 
about  them,  I  never  really  knew. 

I  was  there  only  I  think  -- 
Hicke:     I  have  three  years. 

McBaine:   Three  years;  I  was  going  to  say  two-and-a-half. 
Hicke:    That's  right,  because  '36  to  '39  are  the  dates  that  I  came  up  with. 


Working  With  John  Francis  Neylan 


McBaine: 

Hicke: 
McBaine: 
Hicke: 
McBaine: 


In  '39,  I  married  Jane  Neylan,  whose  father  was  a  lawyer  here  in  San 
Francisco,  John  Francis  Neylan.   I  went  to  work  for  him  after 
leaving  Mr.  Orrick. 

He  was  a  very  well-known  San  Francisco  lawyer. 

Yes. 

Were  you  involved  in  any  particular  cases  that  you  remember? 

Yes  I  was.   Mr.  Neylan  had  been  the  lawyer  for  William  Randolph 
Hearst  and  became  what  was  called  the  Chancellor  of  the  Exchequer 
for  Mr.  Hearst.  As  such,  he  was  not  only  his  lawyer  but  chief 
financial  advisor. 

Mr.  Hearst  was  always  a  very  wealthy  man,  and  in  those  days,  he 
was  building  San  Simeon.   I  think  the  evidence  showed  in  this  case 
that  he  was  spending  over  $5  million  a  year  at  that  time,  which  was 
quite  a  lot  of  money,  and  needless  to  say,  living  in  a  princely 
style.   He  had  properties  and  a  number  of  corporations:   one  that 
owned  the  newspapers  was  called  Hearst  Consolidated.   Mr.  Hearst 
owned  a  controlling  interest,  but  there  were  outside  stockholders, 
public  stockholders.   He  had  a  whole  series  of  other  corporations 
which  owned  various  specific  properties:   one  owned  King  Features, 
which  does  the  comic  strips;  one  owned  newsprint  plants,  for 
example;  one  owned  the  Sunday  magazine  section;  one  owned  real 
estate,  et  cetera. 

An  accountant  in  New  York  spent  several  years  studying  the 
Hearst  empire,  so-called,  and  wrote  a  book  about  it.   I've  forgotten 


43 

the  name  of  the  book.  Mr.  Hearst  was,  of  course,  a  much-discussed 
public  figure.   A  New  York  lawyer  picked  up  this  book,  read  the 
book,  and  got  the  idea  that  he  ought  to  file  a  lawsuit  against 
Hearst.   I  don't  mean  to  say  that  I  knew  the  lawyer  did  this,  so 
perhaps  I  should  say  some  stockholder  thought  of  this,  but  I  had  the 
impression  that  the  lawyer  thought  of  it  and  found  the  stockholders. 

In  any  case,  he  filed  a  suit  against  Hearst  and  all  his  corpo 
rations  --  naming  Mr.  Hearst  and  Mr.  Neylan,  and  maybe  a  couple  of 
other  Hearst  executives  --  alleging  that  they  had  been  fraudulently 
draining  funds  from  the  partially  publicly  owned  company  in  order  to 
support  Hearst's  wholly  owned  companies,  from  which  Hearst  was 
taking  money,  cash,  to  support  his  lifestyle.   I  did  a  lot  of  work 
on  this  thing. 

Hicke:    This  was  on  behalf  of  a  stockholder? 

McBaine:   On  behalf  of  a  stockholder;  it  was  a  stockholder's  suit,  a  stock 
holder  of  Hearst  Consolidated,  so  it  was  against  Hearst  Consolidated 
and  all  the  directors  and  Hearst  personally. 

After  this  complaint  was  filed,  the  attorneys  in  New  York  who 
had  drawn  up  the  complaint  were  unable  to  serve  it  on  Mr.  Hearst, 
because  he  didn't  come  to  New  York.   He  was,  I  guess,  sitting  out 
here  at  San  Simeon  at  the  time.   Some  other  New  York  lawyer  went 
down  to  the  court  clerk's  office,  and  got  a  copy  of  the  complaint, 
and  flew  out  to  California  with  this  copy  of  the  complaint;  at  least 
this  was  the  story.   He  had  it  put  in  shape  to  file  in  California, 
and  got  a  California  lawyer  named  Harold  Morton,  a  prominent  Los 
Angeles  lawyer,  who  filed  the  complaint  in  the  Los  Angeles  Superior 
Court,  and  got  service  on  Mr.  Hearst  because  he  was  present  in 
California. 

About  twenty- four  hours  later,  the  original  New  York  lawyer 
arrived  by  airplane  from  New  York  and  became  the  first  intervenor  in 
that  case,  but  he  was  too  late  because  the  second  New  York  lawyer 
and  the  California  lawyer  he  hired  were  now  in  number  one  position; 
they  had  control  of  the  case,  and  they  were  the  ones  who  were  going 
to  get  the  major  fee  out  of  the  case. 

Mr.  Hearst  had  personally  hired  one  of  the  leading  lawyers  in 
Los  Angeles  --  I'm  pretty  sure  it  was  John  Hall  of  Lawler,  Felix  & 
Hall  who  was  Hearst's  personal  attorney  --  and  two  or  three  other 
leading  Los  Angeles  lawyers,  whose  names  escape  me  right  now;  I 
might  think  of  them  later.   One  was  also  the  lawyer  for  the  Los 
Angeles  Examiner,  the  Hearst  paper.   There  were  about  four  of  the 
most  senior  members  and  outstanding  members  of  the  Los  Angeles  Bar, 
not  from  either  of  the  big  firms,  the  major  firms,  the  O'Melveny 
firm  and  Gibson,  Dunn  &  Crutcher,  but  other  firms  there. 

I  represented  Mr.  Neylan,  my  father-in-law.   I  suppose  I 
thought  I  was  probably  going  along  for  the  ride  with  all  this  legal 
talent  acting  for  the  other  defendants. 


Hicke: 
McBaine: 


44 

The  plaintiff  started  taking  depositions.   Among  others,  they  . 
took  Mr.  Hearst's  deposition.   Mr.  Hearst  did  it  in  the  grand  style. 
He  invited  all  the  lawyers  --  all  the  plaintiff's  lawyers  and,  of 
course,  all  the  defense  lawyers;  there  must  have  been  a  total  of 
twenty  or  something  like  that  --to  San  Simeon,  and  we  spent  three 
or  four  days  there  being  entertained  by  Mr.  Hearst  royally,  with 
dinner  and  a  movie  every  night  in  his  private  movie  theater,  and  all 
the  rest  of  it.   And  being  entertained  by  Marion  Davies,  who  was  in 
residence.   Needless  to  say,  we  had  a  most  fascinating  time. 

I  remember  one  story,  which  I  might  interject;  I  don't  know  if 
it's  ever  been  told.   Mr.  Hearst  is  dead  now,  and  I  don't  think 
there's  any  impropriety  in  talking  about  his  private  life.   Besides, 
as  far  as  I'm  concerned,  it  reflects  great  credit  on  him,  the  story 
I'm  going  to  tell  you.   In  any  case,  every  night  after  dinner,  there 
was  a  movie  shown.  Then  after  the  movie,  we'd  come  back  to  the  main 
hall,  and  Mr.  Hearst  would  ask  if  anyone  would  like  a  beer  or  a 
drink  of  any  kind.   I  think  he  limited  it  to  beer  and  soft  drinks. 
As  you  may  know,  Marion  Davies  had  a  problem  with  alcohol. 
Mr.  Hearst,  of  course,  was  upset  about  this  and  trying  to  help  her 
with  this  problem.   I  don't  remember  whether  she  was  there  that  late 
in  the  evening  or  not  --it  doesn't  make  any  difference  --  but  some 
body  would  say,  "Yes,  I'll  have  a  beer."  This  would  be  11  o'clock 
or  maybe  later. 

To  my  astonishment,  in  this  huge  castle  with  all  sorts  of  ser 
vants  in  it  there  wasn't  anybody  around;  at  least  he  didn't  call 
anybody.    He  would  trot  out  to  the  kitchen  and  go  into  the  pantry. 
When  he  went,  I  went  with  him.   I  was  the  youngest  there,  by  far,  so 
I  went  to  help  him.   When  we  got  into  the  pantry,  there  was  a  great, 
big  icebox,  with  a  hasp  and  a  great,  big  padlock  on  it.   All  of  the 
liquor  was  in  this  icebox  with  a  padlock  on  it.   He  had  a  wad  of 
keys  in  his  pocket,  and  he'd  bring  out  these  keys  and  search  until 
he  got  the  right  one  for  the  padlock,  and  open  it,  and  get  the  beer, 
and  bring  it  back  in  there. 


That  castle  is  huge;  have  you  ever  been  there? 


Yes. 


It's  a  huge  place.   Nobody  in  that  place  could  get  to  that  liquor 
there,  and  he'd  go  out  and  bring  this  in  personally  to  serve  all 
these  people,  who  were  suing  him  and  trying  to  take  millions  of  dol 
lars  from  him,  just  to  try  to  prevent  Marion  Davies  from  getting 
hold  of  any  of  this  liquor,  which  shows  his  devotion  to  her. 


It  was  a  fascinating  experience. 


It 


The  plaintiffs'  counsel  also  took  Mr.  Neylan's  deposition, 
turned  out  that  Mr.  Neylan,  as  Chancellor  of  the  Exchequer  for 
Hearst,  was  the  one  directly  responsible  for  almost  all  of  the 
transactions  that  were  being  challenged.   Mr.  Hearst  really  had  only 
the  most  general  idea  of  them,  so  his  testimony  was  not  of  any  great 


45 

help  to  the  plaintiffs,  nor  was  it  any  great  help  to  the  defense. 
He  didn't  know  enough  of  the  details  to  make  it  important,  but 
Mr.  Neylan  did.  Not  only  that,  he  had  all  the  records. 

By  this  time,  the  case  had  been  going  on  for  months.   I  had 
done  a  lot  of  work  on  it.   I  had  gone  all  through  Mr.  Neylan'  s 
records,  and  I  really  knew  more  about  the  details  of  the  various 
transactions  challenged  than  anyone.  There  were  nineteen  "counts," 
with  specific  charges  of  fraud  in  each  count,  plus  one  count  to 
begin  with  which,  I  think,  was  a  general  fraud  complaint  without 
being  specific  about  anything.   Then  there  was  one  for  the  news 
print,  one  for  the  comics,  one  for  this,  that,  and  the  other  thing. 

The  trial  started.  The  plaintiffs  put  on  a  case,  and  it  was 
not  a  very  substantial  case.   At  the  end  of  the  plaintiffs'  case,  we 
went  back  to  the  Biltmore  Hotel,  where  we  were  staying.   I  think  all 
of  the  out-of-town  lawyers  were  staying  there.   I  told  Mr.  Neylan 
that  I  thought  we  should  make  a  motion  to  dismiss  at  the  end  of  the 
plaintiffs'  case  on  the  ground  that  they  had  not  even  made  a  prima 
facie  case. 


McBaine:   Armed  with  all  the  background  I'd  gotten  from  Mr.  Neylan  's  files,  I 
was  convinced  that  we  could  put  on  a  convincing  rebuttal  if  we  had 
to  present  the  defense  side  of  the  case.   It  would  take  weeks;  it 
was  long  and  complicated.   I've  thought  of  this  lately,  and  I  can't 
remember  why,  but  none  of  the  other  defense  counsel,  all  these  emi 
nent  senior  men  representing  Hearst  personally  and  the  various 
Hearst  companies,  had  not  had  access  to  Mr.  Neylan's  files.   I  can't 
remember  now  whether  that's  because  they  were  refused  access  or 
because  they  never  asked.   I  have  to  think  it  was  because  they  never 
asked,  because  I  don't  believe  Mr.  Neylan  would  have  refused  them 
access  had  they  asked,  but  in  any  case,  they  hadn't.   So  I  was  the 
only  one  in  the  place  who  really  had  any  idea  whether  we  could  rebut 
the  plaintiffs'  case  or  not  if  we  had  to  do  it. 

So  all  the  other  senior  counsel  on  this  thing  were  against  my 
suggestion.   They  were  afraid  to  make  a  motion  to  dismiss,  because 
if  the  motion  was  denied  and  then  the  judge  said  to  them,  "All 
right,  now  present  your  defense,"  they  were  afraid  they  didn't  have 
anything  convincing  to  say.   They  declined  to  join.  They  thought  it 
was  a  crazy  suggestion.   Maybe  if  I  had  been  older  I'd  have  been 
more  cautious,  too. 

Mr.  Neylan  told  me  no,  they  wouldn't  agree  with  it.   And  who 
was  I?   I'd  been  out  less  than  five  years,  in  practice  four  or  five 
years,  something  like  that.   I  remember  he  told  me  no,  and  I  was 
very  upset  because  I  felt  so  strongly  about  this  thing.   I'd  been 
working  on  it  for  months. 

I  was  just  about  to  go  to  bed;  it  was  11  or  so,  late  in  the 
evening.   The  phone  rang  in  my  room  at  the  Biltmore  --  and  I  can 


46 

remember  it  very  well  --  and  he  said,  "Well,  I've  been  thinking 
further  about  what  you  said,  and  if  you  think  we  should  do  it,  go 
ahead  and  make  a  motion  to  dismiss  tomorrow."  So  I  did  the  next 
morning.   I  made  a  motion  to  dismiss  the  plaintiffs'  case,  and  none 
of  the  other  defense  lawyers  joined  in  the  motion.  They  were  preju 
diced  because  they  didn't,  as  I  say,  know  how  they  were  going  to 
rebut  the  plaintiffs'  case.   I  thought  I  did  know. 

Hicke:    It  also  kind  of  left  you  standing  out  there  all  by  yourself. 

McBaine:   All  by  myself.  So  I  made  the  motion  to  dismiss,  and,  as  I  said, 

there  was  this  general  count  of  fraud,  conspiracy  and  fraud  in  gen 
eral,  and  then  nineteen  specific  counts. 

My  opening  argument  on  the  motion  to  dismiss  was  two  and  a  half 
days  long,  I  can  remember  that.  Altogether  it  took  about  five  days, 
the  argument  on  the  other  side  and  rebuttal  by  me,  at  the  end  of 
which  time,  the  judge  ruled  orally  from  the  bench.   He  dismissed  the 
first  count,  which  was  the  general  conspiracy  and  fraud  count,  and 
said  that  as  to  the  other  nineteen  counts,  there  was  no  element  of 
fraud  in  any  one  of  them;  that  the  only  question  was  an  accounting 
question:   whether  the  transfers  from  one  company  to  the  other  had 
been  properly  documented  and  accounted  for.   It  ultimately  turned 
out  that  there  were  several  errors  in  these,  some  going  one  way,  and 
some  going  the  other,  so  that  they  almost  cancelled  one  another  out. 
The  whole  lawsuit  was  over. 

I  don't  think  I  ever  quite  matched  that  one  with  anything  I  did 
subsequently.   It  was  not  only  a  great  thrill.   That  afternoon,  I 
think,  I  got  a  telephone  call  at  lunchtime,  and  my  wife  either  had 
gone  to  the  hospital  to  have  a  baby  or  had  had  it,  I  can't  remember 
which  right  now.   In  any  case,  as  soon  as  I  finished  the  argument 
and  got  the  ruling  from  the  judge,  I  asked  to  be  excused  and  asked 
if  I  could  be  relieved  of  not  coming  to  court  the  next  morning, 
because  I  had  to  go  to  San  Francisco;  my  wife  was  giving  birth  to  a 
child.   I  think  those  New  York  lawyers  thought  I'd  staged  that  one, 
and  that  it  was  a  complete  phony. 

I  left  in  a  blaze  of  glory. 


World  War  II  Years 


McBaine:  Also,  at  about  the  same  time,  I  received  greetings  from  the  presi 
dent  of  the  United  States  calling  me  up  to  active  duty  in  the  navy. 
I  was  in  the  Naval  Reserve.   I  never  got  back  to  the  court.   The 
case  was  concluded  with  all  of  the  accounting  transfers  going  on 
between  the  parties  in  all  of  those  other  nineteen  counts  --  it  took 
weeks  for  that  --  but  I  was  sitting  up  here  on  Treasure  Island  in  a 
Sacramento  River  paddleboat  [laughs]. 

Hicke:    You'd  already  done  the  major  share  of  the  work. 


47 

McBaine:   It  just  turned  out  that  way,  because,  as  I  say,  it  was  a  complete 

accident.  I've  never  been  in  a  case  quite  like  that  since  [laughs]. 
I've  never  been  in  a  case  where  the  other  .lawyers  let  one  alone  that 
long.  I  really  don't  understand  why  they  did  this,  but  in  any  case,. 
that's  the  story. 

Hicke:    Did  you  ever  get  any  reactions  from  Mr.  Hall  or  any  of  the  other 
attorneys? 

McBaine:   Yes,  they  were  all  most  complimentary. 
Hicke:    Did  they  express  approval? 

McBaine:   Sure.   John  Hall  was  a  very  good  friend  of  mine  in  subsequent  years. 
Lawler,  Felix  &  Hall  has  been  for  many  years  Pillsbury,  Madison  & 
Sutro's  Los  Angeles  correspondent,  so  to  speak.   At  that  time,  I  had 
no  connection  with  PM&S,  but  subsequently,  I  certainly  did. 

And  that,  incidentally,  was  the  end  of  my  connection  with 
Mr.  Neylan  because  I  never  went  back  to  his  office  after  the  case 
was  over. 

Hicke:    You  were  called  into  the  navy  right  about  that  time? 

McBaine:   I  was  called  into  the  navy  on  July  1,  I  think  it  was,  in  1941, 
because  I  was  a  Naval  R.O.T.C.  graduate  and  an  ensign  in  the 
reserve.   So  then,  as  I  say,  I  was  assigned  to  a  Sacramento  River 
paddleboat  tied  up  out  here  at  Treasure  Island.   I  had  to  report  for 
duty  at  8:30  every  morning  and  then  sit  all  day  without  a  blessed 
thing  to  do;  they  didn't  even  have  a  book  aboard.   They  were  using 
it  to  house  a  pool  of  officers.   They'd  call  people  up  to  active 
duty,  and  they'd  put  them  in  there  until  they  decided  what  to  do 
with  them. 

I  came  closer  to  having  a  nervous  breakdown  than  I've  ever  been 
in  my  entire  life,  after  all  this  hard  driving  at  the  court  in  Los 
Angeles  for  the  six  months  that  we'd  been  at  it  down  there,  then  to 
come  up  here  and  then  be  cooped  up  all  day  long  without  a  single 
thing  to  do.   I  damned  near  went  nuts.   The  upshot  of  that  was  that 
I  wound  up  being  assigned  by  the  navy  to  what  was  then  called  the 
Coordinator  of  Information,  which  became  O.S.S.  [Office  of  Strategic 
Services],  which  in  turn,  subsequently,  became  the  C.I. A.  [Central 
Intelligence  Agency]. 

Hicke:    Have  we  finished  with  your  work  for  Mr.  Neylan? 

McBaine:   Yes,  there  were  several  interesting  cases,  but  I  don't  think  they 

are  important  for  this  history  of  PM&S.   And  certainly  that  was  the 
most  interesting  case  I  had  anything  to  do  with. 

Hicke:    It  would  be  hard  to  top  that  one. 
McBaine:   Yes,  it  certainly  would  be. 


Hicke: 


48 

But  still  we  do  want  to  hear  about  the  other  interesting  ones  also, 
whatever  you  think  is  worthwhile;  I'll  leave  it  up  to  you. 


McBaine:   Let's  go  on  to  the  World  War  II  years. 
Hi eke :    Okay . 

McBaine:   I  was  assigned  by  the  navy  to  O.S.S.   [William  J.]  Bill  Donovan  was 
the  head  of  it,  Coordinator  of  Information;  [pointing  to  picture  on 
wall]  that's  him  right  there,  the  lower  right.  William  J.  Donovan. 
I  don't  know  if  you  know  about  him.   He's  one  of  the  most  colorful 
characters  of  modern  American  history,  I  think. 

Hicke:    You  worked  for  him? 

McBaine:   I  did  when  I  was  assigned  to  the  Coordinator  of  Information.   My 
wife  and  I  and  one  child  went  to  Washington  in  the  late  summer  of 
1941.  We  had  all  of  our  furniture  and  everything  sent  there.   We 
found  a  very  nice,  small  house  out  in  the  Calorama  Road  district  in 
Washington,  which  is  a  splendid  neighborhood.   It  fronted  on  a  park, 
which  was  great  for  the  baby.   We  got  well  set  up  several  months 
before  Pearl  Harbor,  so  we  were  not  pressed  for  time.   We  rented  a 
vacant  house  and  put  all  our  furniture  in  it.   After  I  reported  to 
duty,  I  was  made  a  personal  assistant  to  Colonel  Donovan,  as  he  then 
was.   He  was  a  colonel  in  World  War  I  and  the  most  decorated 
American  hero  of  World  War  I.   He's  the  only  man  who  won  all  of  the 
decorations  that  the  U.S.  had,  including  the  the  Congressional  Medal 
of  Honor.  Even  MacArthur  didn't  have  that;  he  was  awarded  the  Con 
gressional  Medal  much  later. 

Another  young  lawyer  from  Donovan's  office  in  New  York  and  I 
were  his  personal  assistants.   That  was  really  one  of  the  most 
interesting  times  anyone  could  possibly  have.   Donovan  was  a  very, 
very  colorful  man.   He  was  born  alongside  the  railroad  tracks  in 
Buffalo  and  married  the  daughter  of  the  town's  leading  family.   It's 
said,  and  I'm  sure  it's  true,  he  even  went  to  elocution  school  to 
polish  his  diction  and  his  speaking  voice.   He  had  a  beautiful,  soft 
speaking  voice,  but  he  was  one  of  the  most  aggressive  and  innovative 
and  imaginative  human  beings  you  could  possibly  imagine.   He  was  a 
really  tremendous  driver,  all  in  this  soft,  very  nice,  not  falsely 
cultivated  but  cultivated-sounding  voice,  and  the  greatest  leader 
I've  ever  seen  anyplace. 

When  Pearl  Harbor  happened,  it  was,  of  course,  on  a  Sunday,  and 
I  heard  it  on  the  radio,  somehow  or  another,  or  maybe  some  neighbor 
did;  I  don't  remember  who  told  me.   But  anyway,  I  heard  about  it, 
and  I  went  down  to  the  office.   We  were  not  wearing  uniforms  in 
peacetime;  we  just  wore  civilian  clothes.   I  went  down  to  the 
office,  which  wasn't  too  far  from  where  we  lived,  and  he  was  there. 
He  called  me  in.  His  door  was  down  at  one  end  of  a  wing  in  the 
building,  and  his  door  was  always  open.   I  think  O.S.S.  had  30,000 
people  in  it  by  the  time  war  was  over,  and  his  door  was  still  open. 
All  you  had  to  do  was  walk  down  the  hall  and  walk  right  into  his 


49 


Hicke: 
McBaine: 
Hicke: 
McBaine: 


Hicke: 
McBaine: 


room,  if  you  had  the  guts  to  do  it,  but  you'd  better  have  something 
worthwhile  to  say  when  you  got  there  or  you'd  regret  the  fact  that 
you'd  ever  done  it.   But  nevertheless,  I  don't  think  I  ever  knew 
anybody  else  who  had  an  open  door  the  entire  time.   His  personal 
assistant  and  senior  secretary  was  in  a  room  to  one  side  of  him,  so 
you  didn't  have  to  go  through  the  secretary's  room. 

He  called  me  in,  and  he  said,  "Do  you  know  who  is  the  com 
manding  officer  in  the  --"  what  is  the  naval  district  here  in  San 
Francisco,  California?   I  think  it's  the  twelfth,  but  I'm  rusty.   I 
said,  "Yes  sir,  it's  Admiral  Greenslade."  He  said,  "Well,  get  him 
on  the  phone.   Ask  him  what  the  situation  is  out  there."   [laughs]  I 
was  an  ensign.   I'd  only  been  an  ensign  for,  I  don't  know,  I  guess 
since  when  I  was  in  the  reserve,  but  I'd  only  been  on  active  duty  a 
couple  of  months.   So  I  was  an  ensign,  for  God's  sake,  and  he  said, 
"Get  me  this  admiral  on  the  telephone." 

And  it  was  just  after  Pearl  Harbor? 
And  it  was  just  after  Pearl  Harbor. 
The  admiral  might  have  had  a  few  things  to  do. 

He  didn't  explain  why,  he  just  said,  get  him  on  the  telephone  and 
ask  him  what  the  situation  is  out  there. 

It  turned  out,  subsequently,  that  nobody  from  Washington  had 
been  in  touch  with  the  West  Coast.   It  was  Sunday,  and  the  Navy 
Department  and  Department  of  the  Army  were  shut  down.   They  had  a 
duty  officer  down  at  each  place,  but  that's  all.   Don't  you  remember 
General  [George  C.]  Marshall  was  out  riding  horseback? 

Yes.   [laughs] 


And  I  don't  know  where  the  top  admiral  was.   If  it  had  been  anybody 
other  than  Donovan,  I  would  have  said,  "Colonel,  I  can't  do  that." 
But  I  knew  if  I  said  that,  I'd  have  some  other  job  the  next  day;  I 
would  not  be  a  personal  assistant  to  him.   So  I  went  to  a  room  next 
door,  and  I  got  the  long  distance  operator,  and  I  placed  my  call. 
She  said,  "All  long  distance  lines  are  blocked;  they're  shut  down 
all  over  America,"  which  was  true.   They  just  closed  down  everything 
when  the  first  word  of  the  bombing  came  in. 

I  argued  with  her,  but  I  wasn't  getting  anyplace,  so  I  finally 
decided  I'd  better  pull  out  all  stops,  and  I'm  not  going  to  repeat 
my  language  because  it  was  full  of  profanity  by  the  time  I  finished. 
I  said,  "Listen,  blankety,  blankety.   I  am  an  officer  in  the  United 
States  Navy,  and  I'm  calling  at  the  express  request  of  Colonel  Wil 
liam  J.  Donovan,  the  Coordinator  of  Information,  who  is  calling  at 
the  express  request  of  the  White  House,"  which  was  true,  "to  find 
out  what  the  situation  is  on  the  West  Coast.   Now,  you  put  me 
through."  And  I  guess  I  convinced  the  telephone  operator  with 
this  --  it  was  a  woman  --  so  she  put  me  through  and  the  phone  rang, 


50 

and  a  voice  said,  "Admiral  Greens  lade  here."   [laughs]   I  thought  I 
was  going  to  die.   I  said,  "This  is  uh,  uh,  uh  [mumbles]  McBaine." 
I  wasn't  going  to  say,  "this  is  Ensign  McBaine,"  or  he'd  hang  up,  or 
at  least  so  I  thought. 

Hicke:    [laughs]  You  didn't  want  to  promote  yourself  on  the  spot? 
McBaine:   No.  [laughs] 

So  I  mumbled  my  name,  uh,  uh,  uh,  Turner  McBaine,  and  I  said, 
"I'm  calling  at  the  request  of  Colonel  Donovan,  who  is  calling  at 
the  request  of  the  White  House,  to  find  out  what  the  situation  is 
out  there  on  the  West  Coast."  The  only  explanation  I  have  for  his 
reply  is  that  this  was  an  hour  or  two  after  Pearl  Harbor,  and  Green- 
slade  and  the  others  had  been  sitting  out  there  in  absolute  silence. 
Nobody  from  Washington  had  called  them,  and  he  was  so  happy  to  hear 
from  somebody  in  Washington  [laughs]  that  he  finally  --  he  hesi 
tated,  and  I  could  see  he  was  making  up  his  mind  whether  to  talk  to 
me  or  not.   But,  finally  --  my  analysis,  as  I  say  --  he  was  so  happy 
to  hear  from  somebody,  he  decided  to  give  me  the  whole  story.   So  he 
started  rattling  this  off,  and  I  was  taking  notes,  just  filling  page 
after  page,  and  he  was  telling  me  about  how  many  planes  they  had, 
how  many  ships  they  had,  small  ships,  and  submarine  nets  they  had  in 
the  bay,  how  many  submarine  sightings  had  been  reported  --  all  of 
them  false  really  --  this,  that,  and  the  other  thing.   So  I  was 
taking  everything  down  just  as  hard  as  I  could  go. 

Finally  we  finished,  and  I  said,  "Admiral,  hold  on  just  a 
minute,  will  you  please?   I'm  going  to  get  Colonel  Donovan."  So  I 
rushed  into  Colonel  Donovan's  room,  he  looked  up,  and  I  said, 
"Colonel.   You've  got  to  come  in  the  other  room,  and  thank  Admiral 
Greens  lade."  He  looked  at  me  and  grinned.   [laughs]   He  came  in  the 
other  room,  and  got  on  the  telephone,  and  he  soft-soaped  the  admiral 
as  only  he  could  do.  Within  about  an  hour,  we  had  a  typewritten 
report  over  to  the  White  House  to  the  president  and  Admiral  Wil 
liam  D.  Leahy  and  all  their  staff  ,  and  that  was  the  first  news  they 
got  of  what  was  happening  on  the  West  Coast.   They  might  have  been 
invaded  by  the  Japanese,  for  all  they  knew  in  Washington. 

Hicke:    That's  an  incredible  story. 

McBaine:   I've  never  gotten  any  official  explanation  of  how  this  happened,  but 
subsequently  I  was  told  it  was  a  navy  regulation  that  nobody  under 
the  rank  of  a  captain  is  supposed  to  call  an  admiral.   You  can't 
have  some  junior  officers  calling  admirals  all  the  time.  The  duty 
officer  down  at  the  Navy  Department  was  not  a  captain,  he  was  some 
junior  officer,  so  I  guess  he  didn't  take  the  initiative  to  call 
himself,  and  I  don't  suppose  anybody  had  asked  him.   This  is  one  of 
the  reasons  why  Roosevelt  picked  Donovan  to  head  the  Coordinator  of 
Information.   He  didn't  give  a  damn  for  protocol  and  things  like 
that.   His  sole  idea  was,  "Get  the  job  done."  He  was  not  too 
popular  with  the  regular  army  and  navy  officers  for  lots  of  reasons, 
but  that  was  the  principal  reason.   That's  why  Roosevelt  liked  him. 
That  was  a  bang-up  start  for  me.   [laughs] 


51 

Hicke:  Indeed,  it  was.  And  all  of  this  was  coming  over  a  civilian  line? 

McBaine:  Yes. 

Hicke:  Supposedly  tappable  and  so  forth? 

McBaine:  Sure. 

Hicke:  And  who  gave  the  order  to  shut  down  the  telephone  lines? 

McBaine:  I  have  no  idea,  maybe  somebody  in  the  White  House  did. 

Hicke:  And  there  were  no  military  lines? 

McBaine:   No,  I  don't  think  so;  no  separate  lines,  and  we  didn't  have  telecom 
munications  in  those  days. 

Hicke:    You  really  got  your  feet  wet  early  in  the  operation. 

McBaine:   [laughs]   It  was  more  amusing  than  important,  but  nevertheless,  it 
was  certainly  an  interesting  experience. 

I  might  also  say,  out  of  order,  but  when  I  first  got  there  and 
reported  to  Donovan,  I  was  a  little  glum,  having  been  called  out  of 
the  law  just  at  the  moment  of  a  great  success  in  this  Hearst  Con 
solidated  case.   We  were  in  the  Lend-Lease  phase  of  things  then,  you 
know;  nobody  knew  we  were  going  to  be  in  a  war,  so  I  wasn't  very 
happy  about  becoming  an  ensign  instead  of  a  practicing  lawyer.   One 
of  the  first  things  Donovan  told  me  when  I  got  there  --  I  guess  he 
surmised  that  I  wasn't  too  pleased  --  was,  "Don't  be  unhappy. 
You'll  learn  more  in  a  couple  of  years  with  me  here  than  you  would 
if  you  were  practicing  law."  I  think  he  was  right. 

The  second  thing  that  happened  was  when  I  first  reported  for 
work,  I  didn't  have  any  regularly  assigned  job;  as  I  say,  I  was  just 
a  personal  assistant  to  him,  and  he  said  to  me,  "Go  out  and  walk  up 
and  down  Pennsylvania  Avenue,  and  go  into  every  building  that  you 
come  to  and  ask  them  what  they're  doing  in  there."  I  thought  he  was 
crazy.   Here's  this  legendary  man  that  I'd  heard  about  from  World 
War  I,  because,  as  I  say,  he  was  the  most  decorated  hero  in  the  U.S. 
Army  in  World  War  I.   "Wild  Bill"  Donovan,  he  was  called. 

What  he  meant  was  this:   Roosevelt  was  creating  all  these 
alphabetical  agencies,  and  he  was  creating  two  or  three  a  week. 
That's  how  often  these  executive  orders  were  coming  out  from  the 
White  House  creating  new  agencies.   They  publish  a  manual  of  the 
Government  of  the  United  States,  which  has  all  the  various  depart 
ments  and  agencies  of  the  government  in  it,  but  the  manual  was  run 
ning  --  I  don't  know  just  how  late  it  was,  but  it  was  way  behind 
time.   The  printer  would  have  had  to  put  on  a  new  edition  everyday. 
There  were  these  agencies  that  were  springing  up  all  over  the  place, 
all  with  authority  from  the  president,  some  executive  order  signed, 
Franklin  D.  Roosevelt. 


52 

I  went  out,  I  walked  in  a  building,  there 'd  be  maybe  a 
receptionist  there,  "I'd  like  to  speak  to  somebody."  She'd  say, 
"Who?"  "Well,  somebody  who's  in  charge,  whoever,"  and  maybe  I 
didn't  always  see  the  top  man.   Sometimes  I  did.   Sometimes  there 
were  only  a  dozen  people  there,  and  he  was  the  top  man.   Anyway,  I'd 
ask  him  what  they  were  doing  and  find  out  what  they  were  doing.   It 
was  an  amazing  experience;  it's  hard  to  believe. 

Hicke:    You  probably  knew  more  about  what  was  going  on  [laughs]  in 
Washington  than  practically  anybody  else. 

McBaine:   [laughs]  After  I  finished  two  or  three  days  of  doing  this,  I  think 
I  did. 

One  of  the  first  lessons  in  bureaucracy  I  learned  came  when  I 
was  ushered  in  to  see  some  rather  youngish  man  who  had  sort  of  a 
bare  room,  with  a  desk  and  a  chair.  He  hadn't  had  the  chance  to  get 
the  furniture  moved  in  yet,  but  he  did  have  a  desk  and  a  chair.   I 
told  him  where  I  was  from  and  asked  him  what  he  did.   I  don  t 
remember  exactly  what  he  said,  but  his  manner  was  terribly  impor 
tant.   He  was  very  self-important,  and  he  gave  me  to  understand  that 
he  was  an  enormously  important  man  in  the  government.   But  he  wasn  t 
very  specific  about  it,  and  I  kept  pressing  him  with,  "Exactly  what 
do  you  do?"  He  finally  said  he  was  a  coordinating  purchasing  agent, 
"instead  of  each  agency  purchasing  desks  and  chairs  and  so  forth, 
they  notify  me,  and  then  we  purchase  for  them  on  a  big  order." 

I  guess  I  must  have  shown  some  amusement  at  that,  or  maybe  my 
poker  face  wasn't  so  good.   Anyway,  he  got  angry,  and  he  said  to  me, 
"Listen.   If  you  don't  think  I'm  important,  buddy,  you  just  go  back 
to  your  office  and  try  to  get  a  chair  or  a  telephone  or  a  typewriter 
and  see  whether  you  think  I'm  important  or  not."   [both  laugh] 

That's  Washington  bureaucracy  at  its  best. 
Hicke:     [laughs]  That's  a  perfect  story  for  Washington. 
McBaine:   That's  right. 

Hicke:    You  were  actually  in  the  service  there  until  1946,  right? 
McBaine:   '45. 
Hicke:    Were  you  in  Washington  all  the  time? 

McBaine:   No.   First,  I  guess,  after  Pearl  Harbor  --  I'm  pretty  sure  it  was 
after  Pearl  Harbor,  although  it  could  have  been  before;  it  doesn't 
make  any  difference  anyway  --  I  was  sent  by  Donovan  to  a  British 
Secret  Intelligence  Service  training  school  for  spies  and  saboteurs 
outside  Toronto  in  Canada.   In  all  the  books  about  O.S.S.,  this  is 
mentioned.   The  fact  of  the  matter  is,  the  United  States  had  no 
secret  intelligence  service  at  the  outbreak  of  World  War  II,  had  not 
had  one  since  World  War  I;  it  had  been  disbanded  at  the  end  of  World 


Turner  McBaine  in  uniform.   1942 


53 

War  I.   Secretary  Henry  Stimson  has  been  quoted  many,  many  times  as 
saying,  "Gentlemen  do  not  read  one  another's  mail."  So  we  had  no 
intelligence  system.   The  British  did.   The  British  cooperated  with 
the  United  States. 

M 

McBaine:   Churchill's  great  objective  prior  to  Pearl  Harbor  was  to  get  the 
United  States  into  the  war.   Of  course,  he  knew  that  Britain 
couldn't  win  by  itself.  There  was  an  Englishman  named  "Little  Bill" 
Stevenson.   He  was  called  "Little  Bill"  and  Donovan  was  called  "Big 
Bill"  by  those  who  knew  them  both.   He  was  a  very  secretive  figure, 
a  very  quiet,  unobtrusive  man,  but  he  was  the  head  of  British  Intel 
ligence  in  North  America.   Canadian-born,  but  then  lived  in  England. 

This  was  a  two-  or  three-week  training  course  up  there  in 
Canada  in  everything  you  could  think  of:   codes  and  ciphers,  all 
sorts  of  covert  activities,  explosives,  how  to  do  all  the  things 
that  terrorists  are  doing  today,  how  to  kill  somebody  silently.   It 
showed  you  more  ways  of  how  to  kill  somebody  than  you  can  believe 
possible,  an  astonishing  number  of  ways.   It  was  a  complete,  profes 
sional  school  in  how  to  do  either  guerilla  work  or  intelligence 
work;  how  to  be  a  spy,  or  run  spies,  control  them,  and  operate  them. 
A  fascinating  business,  really. 

Subsequently,  O.S.S.  established  its  own  school  of  that  kind  in 
Virginia,  but  in  the  early  days  after  Pearl  Harbor,  the  first  people 
went  up  to  Canada.   One  of  the  things  that  you  had  to  do  at  the 
school  was  to  go  into  Toronto,  and  using  a  false  name  --  you  could 
use  your  own  name  if  you  wanted  to,  because  they  wouldn't  know, 
anyway  --  get  a  job  in  some  plant  there  which  was  connected  in  some 
way  to  something  that  was  important  to  the  war.   And  it  was  aston 
ishing  how  easy  it  was  to  do. 

Another  thing  which  left  a  lasting  impression  on  everybody  was 
that  everyone  there  was  given  a  school  name,  like  mine  was  Mac, 
that's  all.   Others  had  nicknames  of  various  kinds,  but  no  unique  or 
family  names;  everything  was  Mac  or  Jack  or  Tom,  and  you  never  knew 
who  anybody  else  was  in  the  school.   It  was  pretty  hair-raising.   I 
remember  we  had  target  practice  there  in  a  basement,  and  we  were  in 
the  dark;  police  training  is  like  this,  too.   There's  a  sudden  flash 
of  light,  and  you  can  see  a  silhouetted  figure  if  you're  really 
fast,  and  the  question  is,  can  you  hit  it?  They  teach  you  all  about 
how  to  handle  firearms  of  all  kinds  like  that.   In  those  days,  we 
didn't  have  all  these  AK-7s  that  just  spray  bullets,  portable 
machine  guns . 

Hicke:    You  had  to  aim. 

McBaine:   You  had  to  aim,  yes,  instead  of  just  spraying  something.   And  these 
plastic  explosives,  stuff  that  looks  just  like  modeling  clay,  that 
you  had  to  learn  to  use.   It  was,  psychologically,  quite  a  strain  on 
everybody  to  be  going  through  all  this  stuff.   Everybody  was  playing 


Hicke: 
McBaine: 

Hicke: 
McBaine: 


54 

practical  jokes.   I  don't  know  if  all  classes  were  alike,  but  mine 
was  like  that.  They  had  a  Canadian  Royal  Air  Force  sergeant  up 
there  who  was  particularly  addicted  to  this,  putting  a  bucket  of 
water  on  the  top  of  a  door,  and  then  when  you  push  the  door,  the 
bucket  comes  down  and  hits  you  in  the  head  [laughs]  and  just  douses 
you  with  water.  This  sort  of  thing  was  big  up  there.   I  think  they 
were  trying  to  lighten  up  the  atmosphere  so  everybody  didn't  get  too 
uptight,  because  everybody  did,  with  all  these  various  activities: 
blowing  up  things  and  killing  people. 

The  last  night  they  had  a  graduation  banquet;  everybody  had 
graduated,  and  everybody  got  drunk.  The  help  did,  too,  at  least 
they  pretended  to.   I  never  knew  for  sure  afterwards.   What  happened 
was  if  you'd  made  a  friend  there,  after  graduation  or  that  gradua 
tion  night  when  you'd  had  a  lot  to  drink,  if  you'd  gone  up  to  some 
body  and  said,  "Hey,  Jack,  my  name  is  McBaine,  and  I'm  so  and  so  and 
so  and  so,"  if  they  learned  about  that,  you  didn't  pass.   And  they 
had  all  their  staff  circulating  around  eavesdropping  and  watching 
you.   You  hadn't  graduated  until  you  finished  that  night. 

Did  anybody  not  graduate? 

That's  right,  they  sure  did.   It  became  known  after  the  first  few 
classes,  but  when  I  was  there,  nobody  knew  that,  but  that  was  part 
of  the  test. 

You  were  among  the  first  class? 

I  was  about  the  second  class  of  Americans  there.   And  four  or  five 
classes  later,  I've  forgotten  just  how  much  later,  they  had  such  a 
riot  that  final  night,  somebody  set  fire  to  the  place  and  burned  it 
down.   [laughs] 

After  I  returned  to  Washington,  Colonel  Donovan  sent  me  out  to 
Cairo  as  the  O.S.S.  representative  in  Cairo  for  the  Middle  East  the 
ater.   I  was  then  maybe  a  lieutenant  junior  grade,  and  I  was  too 
junior  to  be  the  final  representative  there,  but  this  was  when  the 
office  was  first  established,  and  when  I  went  out,  I  was  by  myself. 
The  significance  of  that  is  that  Cairo  was  the  theater  headquarters 
for  the  so-called  Middle  East  theater,  and  that  took  in  Yugoslavia, 
but  not  Italy,  because  that  was  in  the  Algiers  theater,  where  Gen 
eral  [Dwight  D.]  Eisenhower  wound  up  as  the  commanding  general. 
Field  Marshall  "Jumbo"  Wilson  was  the  supreme  commander  in  Cairo. 
And  that  theater  included  Yugoslavia,  Albania,  Greece,  Rumania,  and 
all  the  Middle  Eastern  countries,  and  they  also  had  several  govern 
ments  in  exile  there:   the  Greek  government  in  exile,  for  example, 
was  housed  in  Cairo. 

Donovan  had  a  method  of  rotation  for  people  trained  specifi 
cally  for  field  duty.   For  anybody  who  was  in  not  an  organized  unit 
job,  his  theory  was  you  go  overseas  for  about  a  year,  and  at  the  end 
of  a  year  you  were  so  mad  at  Washington  that  you  were  ready  to 
disown  the  whole  crowd.   They'd  never  answer  your  inquiries,  they 


55 

never  sent  you  the  things  you  needed,  they  didn't  do  this,  they 
didn't  do  that.   Just  about  that  time,  you'd  get  orders  transferring 
you  back  to  Washington,  and  they'd  put  you  in  a  desk  job  in 
Washington.  You'd  sit  there  for  the  next  year,  and  about  that  time, 
you  were  ready  to  kill  those  guys  in  the  field,  who  never  paid  a 
damn  bit  of  attention  to  what  you  told  them  to  do  [both  laugh] ,  and 
didn't  report  back  what  success  they'd  had,  or  failures,  and  by  the 
time  you'd  be  getting  ready  to  kill  them  all,  bang,  out  you'd  go  to 
the  field  again. 

I  made  four  trips  like  that.   I  was  out  a  year,  back  a  year, 
out  a  year,  and  back.  Altogether,  I  spent  about  two  years  in  Cairo 
on  two  different  tours,  I  guess.   During  the  second  tour,  we'd 
invaded  Europe,  and  I  went  into  Italy  the  day  after  the  invasion  of 
Italy  took  place  on  August  8,  1943,  I  believe.   I  went  in  behind  the 
invasion  troops,  south  of  the  invasion  troops  --  I  was  not  part  of 
the  invasion  troops  --  and  the  purpose  was  to  create  a  forward  base 
in  Italy  for  working  into  Yugoslavia  and  Greece  and  Rumania  and 
Albania.   The  O.S.S.  was  sending  in  spies,  intelligence  people,  and 
also  guerillas,  and  saboteurs  to  blow  up  bridges  and  railways  and 
things  of  this  kind. 

I  established  a  base  at  Bari,  on  the  Adriatic  Coast  of  Italy, 
and  remained  there  in  charge  of  the  base  until  the  end  of  1943. 

Also,  all  the  Middle  Eastern  countries  were  in  our  theater. 
During  the  course  of  my  tour  there,  I  visited  every  one  of  those 
Middle  Eastern  countries.   That  was  not  so  highly  important,  but  the 
general  idea  was  you  had  to  make  some  sort  of  plan,  or  at  least  lay 
some  groundwork  for  a  fallback  position  if  somethig  happened.   For 
example,  I  was  in  Cairo  when  Rommel  stopped  about  eighteen  miles 
outside  Alexandria,  and  I  got  evacuated;  all  the  allied  personnel  in 
Cairo  got  evacuated.   I  was  sent  down  to  Asmara,  which  was  in  what 
was  then  Eritrea,  and  a  lot  of  the  British  personnel,  the  WACs 
[Women's  Army  Corps],  and  the  WRENs  [Women's  Royal  Navy  Service] ,* 
I  think  all  the  female  personnel,  were  sent  to  what  was  then  Pales 
tine. 

Then  I  should  say,  at  the  end  of  '43,  Christmas  of  '43,  I  was 
ordered  back  to  Cairo  from  Bari  and  was  sent  to  the  Far  East  on  a 
sort  of  survey  mission,  to  go  through  India,  Ceylon,  Northern  Burma, 
Western  China  (because  the  Japs  had  Southern  Burma  and  Eastern 
China)  preparatory  to  coming  back  to  Washington  and  working  on  a 
desk  job  for  the  Far  East.   That's  when  I  saw  [General  Claire]  Chen- 
nault's  air  force  out  there. 

Hicke:    You  actually  saw  them  in  operation? 
McBaine:   Yes,  the  Flying  Tigers  that  were  out  there. 


An  auxiliary  of  the  British  Navy. 


56 


Hicke:    Flying  the  Hump? 

McBaine:   No.   But  I  flew  the  Hump  from  India  into  Kunming  [China] .  Then  I 
came  back  to  Washington  on  a  desk  job,  and  that's  where  I  was  when 
the  war  ended. 

Hicke:    Sounds  like  you  were  in  the  thick  of  things  all  the  way  around. 

McBaine:   Not  really,  because  when  I  was  sent  to  Cairo  early  in  '42,  I  became 
imbued  with  the  British  idea  that  the  allies  should  invade  south 
eastern  Europe  and  go  up  what  they  call  the  Vardar  Valley,  which  is 
a  valley  which  runs  from  southeast  to  northwest  up  central  Europe. 
If  the  allies  had  done  that  and  attacked  Germany  from  the  south, 
they  would  have  been  able  to  take  all  or  seal  the  Russians  off  from 
taking  all  of  Hungary  and  Austria  and  all  the  rest  of  the  eastern 
European  countries. 

[Winston]  Churchill  was  thinking  of  geopolitics.   The  U.S. 
wasn't  as  sophisticated  as  that;  they  never  have  been,  either  in 
World  War  I  or  World  War  II.   The  decisions  were  made  by  military 
men,  and  they  were  made  solely  on  the  basis  of  military  considera 
tions.   I  was  wrong.   I  thought  we  would  invade  through  there,  and  I 
don't  know  that  I'd  have  been  able  to  do  anything  about  it  if  I'd 
tried  to  get  out  of  Cairo,  but  I  never  got  into  the  European  theater 
of  operations,  which,  of  course,  had  a  lot  more  action  going  in  it 
than  the  Middle  Eastern  theater  did. 

So  no,  I  don't  think  you  could  say  I  was  in  the  thick  of  it.   I 
had  a  lot  of  action,  but  not  what  I  would  have  had  in  the  European 
theater.   I  was  never  in  the  European  theater,  and  I  was  never  in 
the  Pacific  theater.   In  fact,  at  the  end  of  the  war,  when  I  was  in 
Washington  there,  I  got  the  idea  that  I'd  like  to  be  transferred  to 
the  Pacific  and  see  if  I  couldn't  get  back  in  the  navy  and  partici 
pate  in  some  way  in  the  huge  naval  action  that  was  going  on  in  the 
Pacific.   By  that  time,  I  think  I  was  a  lieutenant  commander,  and 
I'd  lost  my  deck  general  rating,  which  means  that  you're  qualified 
to  be  a  deck  officer  on  a  navy  ship.   I  was  a  specialist  in  intelli 
gence,  which  meant  I  was  not  qualified  to  have  a  deck  job  on  a  ship. 

I  was  told  by  people  in  the  Bureau  of  Personnel  that  if  I 
wanted  to  be  transferred  to  the  Pacific,  I'd  probably  wind  up  as  the 
governor  of  some  five-square-mile  island  about  2,000  miles  in  the 
rear  someplace,  [laughs]  so  I'd  better  stay  where  I  was.   So  I  gave 
up  that  idea.   But  that  navy  in  the  Pacific  in  the  last  years  of  the 
war  must  have  been  a  staggering  sight.   But  I  wasn't  bored  to  death, 
I'll  say  that. 

I  had  all  sorts  of  fascinating  experiences  during  the  war 
years,  but  that's  surely  not  relevant  to  PM&S.   There's  some  rele 
vance,  perhaps.   Of  course,  in  the  Middle  East,  I  worked  very 
closely  with  the  British  Intelligence  people.   They  cooperated  with 
us.   They  were  way  ahead  of  us,  because  they  had  the  experience,  the 
training,  technique.   They  had  been  in  it  several  years  longer  than 


57 

we  had  been,  of  course.  I  made  some  very  good  friends  among  the 
British  people  in  the  intelligence  field  there,  and  in  fact,  was 
awarded  a  decoration  by  the  British,  with  which  I  was  very  pleased. 

Hicke:    The  Order  of  the  British  Empire? 

McBaine:   Yes. 

Hicke:    And  you  also  were  awarded  the  Legion  of  Merit? 

McBaine:   Yes.   That's  an  American  decoration,  which  is  somewhat  the  same 
thing.   But  I  was  particularly  pleased  with  the  O.B.E.  because  I 
feuded  with  the  British  pretty  strenuously  at  times,  also,  because 
the  British  were  accustomed  to  commanding  and  running  things,  and 
one  of  the  things  that  Donovan  was  not  going  to  be  was  commanded  and 
run  by  anybody  [laughs]  except  Roosevelt  and  the  American  govern 
ment.   We  had  a  serious  struggle  over  efforts  in  Yugoslavia,  in 
which,  as  I  say,  I  tangled  with  some  of  my  British  friends.   Never 
theless,  they  saw  fit  to  award  me  a  decoration  at  the  end  of  the 
war,  which  showed  that  they  understood  that  I  was  thoroughly  pro- 
British  and  pro-Allies.   Just  because  I  wanted  to  stand  up  for  our 
rights  didn't  mean  that  we  were  anti-British. 

I  think  dealing  with  them  was  good  experience  in  dealing  with 
people.   British  Intelligence  was  staffed  by  some  intelligence  offi 
cers  from  the  armed  services  --  professional  officers,  navy,  army, 
or  air  force  --  but  most  of  them,  I  think  it's  safe  to  say,  were 
really  academics,  and  there  were  some  businessmen,  bankers,  people 
like  that,  people  whose  occupation  involved  the  use  of  the  mind,  and 
they  used  all  of  those  people.   They  took  everybody  out  of  all  the 
universities.   They  took  them  into  the  army,  gave  them  a  rank,  put 
them  to  work  in  intelligence  activities  all  over  the  place.   The 
intelligence  officer  for  General  Montgomery,  for  example,  as  I 
remember  it,  was  an  academician.   They  were  a  very  bright  bunch  of 
people.   Although  well  trained,  they  still  were  products  of  that 
British  system  of  generalism  where  you're  trained  for  everything. 
You  learn  Greek  and  you  learn  Latin.   [chuckles] 

Hicke:    Whether  you  need  it  or  not. 

McBaine:   Whether  you  need  or  not.   You'll  never  use  Greek  or  Latin  again  in 
your  life,  perhaps,  but  the  brain  power  is  there  that  is  developed 
that  you  can  use  on  anything.   That  has  been  their  theory,  and  still 
is,  really. 

I  think  that  was,  in  a  sense,  part  of  what  Donovan  said: 
you'll  learn  more  while  being  with  me  than  if  you  were  practicing 
law.   There's  no  question  that  we  had  struggles,  working  with  the 
governments  in  exile,  working  with  the  Zionists  who  gave  us  enormous 
help  with  personnel.   In  fact,  we  were  swamped  with  volunteers. 
They  weren't  Israelis  then,  I  think  it  was  called  the  Jewish  Agency 
that  had  a  shadow  government,  what  the  British  call  a  shadow  govern 
ment.  They  were  already  planning  to  take  over  Israel,  although  they 


58 


Hicke: 

McBaine: 


wouldn't  admit  it,  and  they  had  these  shadow  people,  and  they  had  an 
intelligence  service  themselves. 

I  was  in  contact  with  the  man  who  was  running  that ,  and  they 
were  supplying  these  people  to  us.  They'd  have  these  young  girls 
who  would  come  in  and  volunteer  to  parachute  back  into  the  middle  of 
Nazi  Germany  with  a  radio  and  be  spies,  which  is  pretty  staggering. 
It's  hard  to  realize.   But  if  you  looked  into  it,  you'd  find  out 
that  person  had  lost  her  whole  family,  possibly  they'd  all  been  sent 
to  the  gas  chamber  someplace,  and  she  really  didn't  care  whether  she 
lived  or  died.   She  would  volunteer  for  this  kind  of  thing. 

In  those  days,  you  couldn't  order  anybody  to  make  a  parachute 
drop,  which  I  thought  then  and  think  now  was  ridiculous.   You  can 
order  a  soldier,  an  infantryman,  to  get  up  out  of  a  trench  and 
charge  a  machine  gun  nest,  but  you  couldn't  order  him  to  make  a  par 
achute  jump.   And  here  I  was  sending  all  these  people  into  making 
parachute  jumps. 

Especially  as  I  saw  females  jumping,  that  got  my  goat,  and  I 
decided  to  hell  with  that.   So  I  went  to  parachute  school  in  Pales 
tine  [chuckles].   I  guess  it  wasn't  entirely  selfish,  because 
there's  another  aspect  to  this  story,  but  it  was  really  just  so  that 
I  wouldn't  be  put  in  a  position  of  sending  people  to  do  something 
that  I  hadn't  done  myself.   And  it  wasn't  all  that  bad.   It's  non 
sensical,  that's  all;  when  you're  flying  around  in  an  airplane,  to 
get  up  out  of  your  seat  and  go  to  the  door  and  jump  out  is  just 
simply  nonsense.   You  say  to  yourself,  "Why  in  God's  name  am  I  doing 
this?" 

It  defies  all  logic. 

Yes,  it  defies  [laughs]  all  logic.   And  it's  a  sheer  act  of  will 
power  to  make  yourself  do  it,  but  once  you  get  in  the  air  and  your 
chute's  open,  then  it's  really  a  very  pleasant  experience,  if  there 
isn't  somebody  below  shooting  at  you. 

The  other  reason  that  I  went  up  to  Italy  was  one  of  our  agents 
destined  for  Yugoslavia  failed  to  go,  three  times  running;  he  came 
up  sick  each  time.   I  finally  concluded  that  he  was  never  going  to 
go,  and  I  got  so  mad  because  we'd  been  working  for  months  training 
him  that  I  decided  to  go  myself.   I  went  from  Cairo  up  to  Italy,  and 
the  British  were  flying  all  the  planes  from  the  Adriatic  side  of 
Italy.   The  British  army  was  going  up  the  Adriatic  side,  and  the 
American  army  was  going  up  the  Mediterranean  side. 

I  got  up  there  and  the  British  wouldn't  take  me.   They  said 
that  the  reason  they  wouldn't  take  me  was  that  I  had  never  done  a 
parachute  jump  before  and  that  I  would  endanger  the  lives  of  all  of 
the  others.  There  were  six  or  seven  other  people  on  this  particular 
mission,  this  jump.  They  were  going  to  go  to  the  same  place;  we 
were  going  to  Tito's  headquarters.   They  told  me  that  I  would 
endanger  all  of  the  other  people  because  I  hadn't  made  a  jump.   I 


59 


Hicke: 
McBaine: 

Hicke: 

McBaine: 


subsequently  concluded  that  was  a  phony  excuse,  but  that's  the 
excuse  they  used,  and  they  blocked  me  from  going. 

My  temper  cooled  after  I  got  back  to  Cairo,  and  it's  probably  a 
damn  good  thing  they  did  it,  because  the  real  reason  they  blocked 
me,  which  they  didn't  tell  me,  was  the  intelligence  reports  they 
were  giving  me.   These  intelligence  reports  were  coming  from  code 
breaking.   Have  you  read  any  of  the  stories  about  the  ultra  machine. 
Have  you  seen  any  of  these  things? 


It' 


s  very  vague, 


It's  a  long  story,  but  the  fact  is  the  Americans  broke  the  Japanese 
code,  as  you  may  know. 

That  I  know,  yes. 

The  British  also  had  broken  the  code  the  Germans  were  using.   This 
was,  of  course,  was  one  of  the  most  tightly  guarded  secrets  in  all 
of  Britain.   It  is  said,  and  a  lot  of  books  say  --  I  don't  know 
whether  it's  true  or  not  --  that  the  British,  through  their  inter 
cepts,  got  word  that  the  Nazis  were  going  to  bomb  Coventry.   They 
could  have  warned  the  people  of  Coventry  and  evacuated  the  city,  but 
Churchill  decided  not  to  do  it,  because  that  would  give  away  the 
fact  that  they  were  reading  the  German  radio  traffic.   Now  whether 
that's  true  or  not,  I  don't  know,  but  that  story  has  appeared  in 
thousands  of  publications.   And  they  had  been  giving  me  these  intel 
ligence  reports  in  Cairo,  which,  it  was  perfectly  apparent,  were 
intercepts  that  they  had  gotten  from  reading  from  the  German  radio 
traffic.   I  didn't  know  if  that  was  worldwide,  but  I  did  know  that 
it  was  true  for  the  Middle  East  theater. 


McBaine:   In  intelligence  work,  the  assumption  is  that  if  anyone  is  captured 
by  the  enemy,  he'll  talk,  sooner  or  later.   You  have  to  make  that 
assumption.   It's  often  not  true;  sometimes  people  can  withstand 
torture  to  the  point  of  death,  but  you  have  to  make  the  opposite 
assumption,  and  therefore,  anybody  who  had  the  knowledge  I  had  was 
not  allowed  in  a  combat  zone.   I  didn't  realize  it  at  the  time,  but 
it  was  foolish  of  me  to  do  this;  it  was  a  good  thing  I  was  sent 
back,  really. 

Hicke:    Does  that  cover  the  years  up  until  1945? 
McBaine:   I  think  so. 

Hicke:    I  know  you  retired  as  a  commander,  U.S.  Naval  Reserve.   This  will  be 
a  good  place  to  stop,  and  we  can  start  again  with  your  joining 
Pillsbury,  Madison  &  Sutro. 


60 


III  POSTWAR  YEARS:   FIRST  NEW  YORK,  THEN  PM&S 


New  York 


[Interview  continued:   June  19,  1986 ]## 


Hicke:    I  wonder  if  we  could  start  this  afternoon  with  what  happened  to  you 
after  the  war.   We  had  just  finished  up  before  with  your  years  spent 
in  the  navy. 

McBaine:   All  right.   Having  been  called  to  active  duty  before  Pearl  Harbor,  I 
was  eligible  to  be  released  the  first  day  after  V-J  Day,  or  victory 
over  Japan.   I  was  discharged  from  the  navy  sometime  in  the  fall  of 
1945.   I  thought  some  of  staying  in  Washington,  B.C.,  but  I  didn't 
want  a  government  job,  and  the  law  firms  there,  which  were  obliged 
to  take  back  all  their  lawyers  who  had  left  to  go  into  the  service, 
were  not  large  enough  to  afford  me  any  opportunity.   I  wanted  to  be 
in  the  private  sector  and,  therefore,  decided  to  go  to  New  York  and 
look  for  a  job.   I  did  and  had  a  most  interesting  experience  walking 
around  downtown  New  York  and  going  in  to  various  law  firms  and 
asking  for  a  job. 

Hicke:    Did  you  just  knock  on  doors,  or  did  you  have  letters  of  introduc 
tion? 


McBaine:   No.   I  just  knocked  on  doors.   All  I  had  was  my  resume  with  me.   New 
York  in  those  days  was,  and  I'm  sure  still  is,  such  that  a  letter  of 
recommendation  was  really  only  important  if  you  were  a  marginal 
case,  let's  say;  otherwise  it  was  your  resume  and  your  record  that 
counted,  and,  I  suppose,  perhaps  personality  and  looks  counted  for  a 
very  minor  part  of  any  employment  committee's  judgment. 

In  any  case,  I  went  to  work  for  the  firm  of  Cahill,  Gordon, 
Reindel  &  Ohl,  because  I  wanted  to  be  a  litigator,  and  that  firm  was 
perhaps  the  leading  litigation  firm  in  New  York  City  at  that  time. 
I  spent  two  years  there  in  New  York.   I  liked  the  work  very  much.   I 
liked  Wall  Street,  the  community  known  as  Wall  Street:   the  law 
firms,  the  financial  firms,  the  banks,  the  insurance  companies,  the 
accounting  firms,  all  very  high-grade  people,  of  course,  recruited 


61 

from  all  over  the  country.   It  was  as  fine,  if  not  the  finest 
business  and  professional  community  that  I've  ever  experienced,  and 
I  enjoyed  that  immensely  and  enjoyed  the  work  in  the  firm.   But  I 
had  a  wife  and  two  small  children  and  that's  very  difficult  on  the 
island  of  Manhattan. 

Hicke:    Could  you  just  elaborate  on  that  sense  of  community,  the  Wall  Street 
community,  a  little  bit? 

McBaine:   Yes.   The  community  has  been  built  up  of  people  from  all  over  the 
country  for  so  many  years  that  I  suppose  customs  have  developed 
based  on  that.   A  native  New  Yorker,  unless  he  brings  some  important 
business  with  him,  really  has  no  edge  in  getting  into  the  big  Wall 
Street  law  firms.   Everybody's  from  out-of-town,  virtually, 
[chuckles] 

One  of  the  most  interesting  things  was  that  the  camaraderie 
between  the  lawyers  was  such  that  you  might  meet  someone  through  bar 
association  activities  or  lectures  or  some  other  method  and  get 
acquainted  and  make  a  friend.   I  found  that  lawyers  in  one  firm  who 
had  a  problem,  and  had  a  good  friend  in  another  firm,  would  call 
them  up,  and  might  even  say,  "Joe,  what  do  you  think  about  so  and 
so?"  or  "Do  you  remember  you  told  me  once  about  something,  and  what 
was  the  citation  on  that?"  or  something  of  this  kind,  and  they  would 
respond.   To  the  best  of  my  knowledge,  that's  not  true  in  San 
Francisco,  and  I  doubt  that  it's  true  in  any  other  city  in  America. 

Hicke:    So  there  was  more  cooperation  than  competition  between  people? 

McBaine:   It's  a  curious  thing.   Of  course  there  was  competition  between  the 
various  law  firms,  but  on  an  individual  basis  people  would  answer 
and  be  helpful  on  a  thing  like  that,  because  they  figured  that  some 
time  in  the  future  they  would  want  to  call  you,  and  they  had  an 
I.O.U.  coming  if  they'd  been  helpful  to  you  in  some  way.   I  don't 
mean  any  serious  help,  or  that  they  would  do  any  work  on  it,  but 
just  something  that  could  be  done  over  the  telephone.   To  me  it  was 
a  curious  habit  and  custom  in  New  York  that  I've  never  seen  anyplace 
else. 

The  only  edge  the  New  Yorkers  had  on  the  out-of-towners ,  I'd 
say,  is  that  they  were  used  to  living  in  New  York  [both  laugh] ,  and 
didn't  mind  the  concrete  canyons  and  the  heat  in  the  summer  and  the 
bad  weather  in  the  winter;  they  were  used  to  it.   I  wasn't,  and,  as 
I  say,  with  two  small  children  and  the  schools  facing  us,  it  was  a 
very  difficult  place  to  be.   My  wife  did  not  want  to  live  in  the 
suburbs  someplace.   She  wanted  to  live  right  in  the  middle  of  Man 
hattan.   So  at  the  end  of  two  years,  I  decided  to  resign  from  my 
job.   I  was  not  a  partner,  I  was  an  associate,  but  I  decided  to 
resign  my  job  and  come  back  to  San  Francisco,  which  I  did.   I  came 
back  about  the  beginning  of  1947  and  joined  Pillsbury,  Madison  & 
Sutro  at  that  time. 


62 


Joining  PM&S 


McBaine: 


Hicke: 

McBaine: 


Let  me  see  if  I  have  the  date  where  I  joined  the  firm.*  I  might  say. 
that  one  of  the  curious  things  is  that  when  I  was  in  New  York  at 
Cahill,  Gordon,  one  of  the  cases  that  I  worked  on  was  a  suit  against 
the  Standard  Oil  Company  of  California,  filed  in  the  federal  dis 
trict  court  in  New  York.   [both  chuckle]  I  worked  on  that  case  with 
John  Cahill,  the  senior  partner,  and  another  partner,  and  in  the 
course  of  that  was  sent  to  San  Francisco  with  a  brief  which  we  had 
prepared  to  submit  it  to  Mr.  Felix  Smith,  who  was  then  senior 
partner  of  Pillsbury,  Madison  &  Sutro  and  general  counsel  for  Socal, 
for  his  clearance  before  we  filed  it. 

I  can  remember  meeting  Mr.  Smith,  which  I  think  was  the  first 
contact  I  had  with  anybody  from  PM&S.   I  had  had  a  copy  of  the  brief 
delivered  to  him  --  it  had  been  sent  to  him;  I  did  not  see  him  -- 
and  I  was  in  the  office  of  the  partner  who  had  worked  with  him  on 
this  matter.   I  had  reviewed  the  brief  with  him  and  told  him  the 
reason  for  some  of  the  arguments  we  made.   The  door  opened,  and  in 
walked  Mr.  Smith.   I  was  introduced  by  Mr.  Smith's  partner,  and  he 
sort  of  grumped  a  "how  do  you  do"  and  said  very  few  words  about  the 
brief;  maybe  he  asked  a  question  or  two.   All  I  can  remember  is  his 
final  statement  as  he  tossed  the  brief  on  the  desk  and  said,  "Well, 
you  can  file  it  if  you  want  to,  but  I  wouldn't  file  it,"  and  stomped 
out  of  the  room.   [both  laugh]   However,  I'm  glad  to  say  the  story 
has  a  more  happy  ending,  because  we  did  file  the  brief  and  it  was 
successful . 

So,  when  I  came  back  to  San  Francisco  and  canvassed  some  of  the 
firms  in  San  Francisco  looking  for  a  job,  fortunately  for  me,  I 
guess,  I  was  not  ushered  into  Mr.  Smith's  office,  but  into 
Mr.  [John]  Sutro's  office.   [chuckles]   Mr.  Sutro  at  that  time  was 
the  --  I  think  he  was  not  only  the  Chairman  of  the  Employment  Com 
mittee,  he  was  the  Employment  Committee.   [both  chuckle]   The  net 
result  is  that  I  was  employed  by  Mr.  Sutro  as  an  associate  in  the 
firm  and  began  my  tenure  with  PM&S.   I'm  sure  there 're  many  lawyers 
who  are  still  available  who  were  employed  by  Mr.  Sutro.   That  was 
also  an  experience  of  its  kind.   They  had  strong  personalities  in 
the  firm  in  those  days. 

Can  you  elaborate  on  that? 

Mr.  Sutro  has  a  remarkable  personality,  as  many  people  undoubtedly 
have  told  you.   He's  abrupt  in  a  way,  he's  gruff  in  a  way.   He's 
very  direct,  and  I've  been  told  that  one  of  his  recruiting  tech 
niques  was  that  if  he  decided  that  he  really  wanted  somebody  and 
offered  them  a  job,  and  if  the  candidate  --  I  know  I've  been  told 
this  happened  in  at  least  one  or  two  cases;  whether  this  was  regular 


December  11,  1947. 


63 

procedure,  I  don't  know  --  if  the  candidate  said,  "Well,  can  I  think 
about  it?  I'll  let  you  know,"  Mr.  Sutro  would  say,  "Well,  you  have 
to  tell  me  yes  or  no.   If  you  walk  out  of  that  door,  then  the  offer 
is  withdrawn."   [both  laugh] 

Hicke:    That's  not  a  normal  technique,  I  don't  think. 

McBaine:   And  it  worked. 

Hicke:    He  was  persuasive  also,  then. 

McBaine:   Maybe  that  will  give  you  some  idea  of  the  difference  between  employ 
ment  in  PM&S  in  those  days  and  employment  in  this  particular  day, 
when  the  firm  takes  everybody  to  the  new  Marine  World/Africa 
[U.S.A.],  and  takes  them  to  picnics  in  the  Golden  Gate  Park,  woos 
them  as  if  they  rushing  them  for  fraternities  or  sororities  at  col 
lege.   That  wasn't  the  method  in  1947. 

Hicke:  So  you  just  had  the  one  interview  with  Mr.  Sutro? 

McBaine:  That's  all. 

Hicke:  And  did  he  offer  you  the  job  on  the  spot? 

McBaine:  He  did. 

Hicke:  And  you  accepted  on  the  spot? 

McBaine:  Yes. 

Hicke:  That  is  unusual. 

McBaine:  I  believe  so.  I  believe  that's  correct.  It  was  not  the  first  firm 
that  I'd  been  to  in  San  Francisco  and  so  I  knew  something  about  the 
San  Francisco  firms.  But  I  believe  that's  correct. 

Hicke:    Where  did  they  start  you? 

McBaine:   I  had  been  a  litigator  in  New  York,  as  I  mentioned  earlier.   So  I 

was  assigned,  when  I  first  came  in,  to  Gene  Bennett,  who  was  one  of 
the  senior  litigating  partners.   Mr.  Sutro,  Mr.  Prince,  and 
Mr.  Bennett  all  were  litigators  in  a  sense,  although  not  exclusively 
trial  lawyers  in  those  days,  but  I  was  assigned  to  Mr.  Bennett.   I 
might  also  say  that  in  those  days,  which  is  a  great  change  from  con 
ditions  today,  young  associates  were  told  what  to  do,  they  weren't 
asked  what  they  would  like  to  do.   They  were  assigned  to  whatever 
the  firm  thought  was  the  best  for  the  firm  and  for  them,  and  I  think 
it  would  have  been  unthinkable  for  any  young  associate  to  say, 
"Well,  I  don't  want  to  do  that  kind  of  work,  I'd  like  to  do  some 
thing  else."  I  think  most  likely  he'd  have  been  out  on  the  street 
if  he'd  had  that  attitude. 


64 

Hicke:    Do  you  attribute  that  to  perhaps  the  size  of  the  firm  now  and  the 
fact  that  there  are  more  different  things  to  do,  or  is  it  just  a 
change? 

McBaine:   No.  No,  I  think  it's  just  a  different  psychology.   Perhaps  size  has 
something  to  do  with  it,  but  --  this  shows  that  I'm  very  old- 
fashioned  --  but  I  don't  think  it's  an  open-and-shut  case  that  our 
present  method  is  the  better  method.   I  think  that  young  lawyers 
ought  to  be  given  a  couple  of  years  or  so  of  experience,  and  varied 
experience  if  possible,  but  I'm  not  at  all  sure  that  they  know 
what's  best  for  them,  better  than  some  of  the  older  lawyers. 

I  cite  my  own  case  in  that  regard.   As  I  say,  I  was  assigned  to 
Mr.  Bennett  as  a  young  lawyer,  and  Mr.  Bennett  was  a  notoriously 
difficult  taskmaster.   He  was  very  meticulous,  very  methodical, 
expected  a  great  deal  of  people  who  worked  with  him,  was  not  after 
flights  of  fancy  or  imagination  from  his  assistants;  he  wanted  bone- 
solid  work  and  that's  all.   He  was  not,  therefore,  the  most  sought- 
after  senior  partner  for  whom  to  work. 

Before  I  really  got  any  experience  at  all  with  him,  Mr.  Felix 
Smith,  who  was  the  head  of  the  firm  and  the  general  counsel  for  the 
Standard  Oil  Company  of  California,  died  suddenly.   As  a  result, 
Mr.  Marshall  Madison  became  general  counsel  to  Standard  in  place  of 
Mr.  Smith.   Now  Mr.  Smith  was  a  remarkable  scholar  and  legal  practi 
tioner  of  the  old  school,  a  brilliant  man  intellectually  in  many 
ways,  with  an  enormous  amount  of  knowledge  in  his  mind.   He  worked 
with  very  few  assistants.   Of  course,  the  law  was  changing  as  he 
died  and  becoming  more  complex  every  day,  with  the  enormous  impor 
tance  of  taxes  and  governmental  regulations  of  all  kinds,  really 
problems  that  previous  generations  had  not  had  to  deal  with  in  the 
way  a  modern  lawyer  does.   So  Mr.  Madison  badly  needed  some  staff  to 
carry  on  this  job  in  place  of  Mr.  Smith. 

I  don't  remember  whether  it  was  a  matter  of  weeks  or  maybe  sev 
eral  months  that  I  was  assigned  to  Mr.  Bennett,  but  then  I  was  told 
one  day  I  was  transferred  and  I  would  work  for  Mr.  Madison  on  the 
Standard  account.  Well,  as  I  say,  I  wasn't  asked  if  I  wanted  to,  I 
was  told  that's  what  I  was  going  to  do.   Looking  at  it  from  this 
point  of  view,  that  wasn't  at  all  a  bad  thing  [chuckles]  since,  of 
course,  twenty-five  or  thirty  years  later,  I  can  say  that  I  not  only 
enjoyed  enormously  representing  an  oil  company  with  all  the  problems 
of  the  oil  industry,  which  I  found  and  still  find  a  fascinating 
industry,  but  wound  up  as  general  counsel  to  Standard  myself.   If 
I'd  continued  with  Mr.  Bennett,  who  knows,  I  might  not  have  had 
nearly  as  much  fun  and  enjoyment  out  of  my  experience  with  PM&S  as  I 
did  have. 

Hicke:    That's  a  good  illustration  of  your  point. 
McBaine:   It's  a  good  illustration  of  my  point. 


65 


Early  Partners  and  Expansion  of  the  Firm 


McBaine:   Now  then,  as  to  the  early  partners  that  I  worked  with,  as  I  say  I 
did  work  with  Mr.  Bennett,  which  was  certainly  good  experience  for 
anyone  too  --  maybe  difficult,  maybe  a  bit  of  a  grind,  let's  say, 
but  it  was  certainly  good  experience.   Mr.  Madison  was  a  different 
type  all  together.   Mr.  Madison  was  the  finest  general  counsel  and 
the  finest  legal  administrator  as  a  head  of  a  law  office  that  I've 
ever  known.   He  had  an  enormous  breadth  of  outlook  and  enormously 
broad  and  varied  experience,  both  of  the  law  and  of  people  and  their 
affairs,  an  outstanding  man  in  every  way.   I  think  as  a  head  of  a 
law  firm  he  was  an  ideal;  there  just  couldn't  be  a  better  person,  in 
my  book.   I've  seen  a  number  of  heads  of  various  large  firms  in  New 
York,  and  while  I  never  knew  anyone  as  intimately  as  I  knew 
Mr.  Madison,  I  don't  think  any  of  them  could  touch  him  as  the  head 
man  of  a  large  law  firm. 

Hicke:    So,  would  you  attribute  a  large  measure  of  the  success  of  that 
period  to  his  leadership? 

McBaine:   Yes.   In  those  days  I  don't  think  there  were  any  formal  committees. 
There  was  an  informal  de  facto  committee  of  the  four  senior  partners 
in  the  firm:   that  is,  Madison,  Prince,  Bennett,  and  Sutro. 
Mr.  Sutro  was  by  some  years  the  junior  member  of  that  foursome,  but 
still  one  of  the  top-ranking  partners,  of  course,  and  everybody  knew 
they  ran  the  firm.   As  I  say,  there  was  no  other  management  com 
mittee,  and  those  four  men  had  the  problems.  What  went  on  between 
them  is  not  known  to  me.   I  know  that  they  must  have  had  differences 
in  views,  but  Mr.  Madison  kept  them  all  going  in  harmony  and  una 
nimity,  and  I'm  not  at  all  sure  that  any  other  one  person  could  have 
done  it.   I'm  sure  they  couldn't  have  done  it  with  the  success  that 
he  did. 

Hicke:    Do  you  happen  to  recall  any  anecdotes  about  either  Mr.  Bennett  or 

Mr.  Madison  or  any  of  these  others  that  would  illustrate  what  it  was 
like  to  work  with  them,  or  the  way  they  ran  the  business? 

McBaine:   For  one  thing,  it  was  the  first  of  1947  when  I  joined  the  firm,  and 
that  was  just  two  years  after  World  War  II  ended.   The  great  eco 
nomic  expansion  of  those  postwar  years  was  under  way,  and  with  it 
the  proliferation  of  government  intervention  in  every  aspect  of 
life,  which,  as  I  say,  just  meant  grist  for  the  mills  of  the  law 
yers.   It  was  Mr.  Madison  who  really  saw  this  development  and  who 
adopted  a  policy  of  expansionism  in  the  firm  and  recruiting  of  new 
lawyers  and  new  members  in  order  to  take  advantage  of  the  opportuni 
ties  that  economic  expansion  was  creating. 

I  can't  remember  any  specific  instances,  but  I  have  the  recol 
lection  that  various  people  disagreed  somewhat  with  that.  There's  a 
natural  tendency  in  some  people  not  to  want  to  change  things;  why 
should  we  bring  a  lot  of  newcomers  in?  Mr.  Madison  had  a  big  view. 
He  could  foresee  beyond  our  existing  boundaries.   He  was  persuasive 


66 

enough  to  convince  everybody  else  that  that  was  our  proper  course  of 
conduct.   Of  course,  some  other  lawyers  were  that  way  too.   Bigness 
didn't  frighten  me  as  much,  because  I'd  come  out  of  a  big  New  York 
firm,  but  some  of  the  other  people  were  uncomfortable  with  it,  and 
if  it  hadn't  been  for  Mr.  Madison  and  his  position  as  the  head  of 
the  firm,  his  prestige  as  the  son  of  a  founding  member  of  the  firm 
and  his  skill  and  personality,  we  never  would  be  the  firm  today  that 
we  are.   It  was  he  who  led  the  expansion  of  the  firm  and  created 
really  a  new  firm. 

This  is  my  own  view.   I  don't  know  that  all  my  partners  would 
agree  with  that,  but  this  is  my  point  of  view. 

Hicke:    I've  heard  him  referred  to  as  the  architect  of  the  modern  firm. 
McBaine:   Yes.   I  think  that's  correct. 

Now,  the  other  thing  that  he  did  which  is  concomitant  to  this 
expansionism  and  the  large  firm  size  was  that  he  was  responsible  for 
the  adoption  by  the  firm  of  the  present  advisory  partner  system  that 
we  have.   I  believe  that  we  are  one  of  the  first  few  large  law  firms 
in  the  United  States  to  have  an  advisory  partner  system,  which  is, 
in  effect,  a  pension  system.   But  if  you  stop  and  think  about  it, 
you  can  see  that  when  you  have  100  or  200  or  300  lawyers,  you  have 
to  adopt  institutional  rules.   You  cannot  solve  everything  on  ad  hoc 
individual  basis;  it's  just  too  big  and  too  complicated.   And  if 
you're  creating  a  large  law  firm  like  this,  you  are  creating  an 
institution,  and  an  institution  can  die  unless  proper  measures  are 
taken  to  see  that  it  flourishes  and  progresses. 

Hicke:    So  he  really  could  get  the  whole  picture  of  the  effects  on  the  firm 
as  well  as  the  individual. 

McBaine:   That's  correct. 

Oddly  enough,  in  a  way,  I  played  a  small  part  in  that.   I  was 
in  a  car  pool.  We  had  a  taxicab  which  took  us  from  the  Southern 
Pacific  Station  at  Third  and  Townsend  to  the  financial  district;  I 
commuted  by  train  from  Burlingame.   One  of  my  cab-mates  in  that 
thing  was  the  then  senior  partner  of  Price  Waterhouse  &  Co.  in  San 
Francisco,  and  in  discussions  in  the  cab  one  morning  --  this  must 
have  been  sometime  in  the  '50s  --  I  learned  that  Price  Waterhouse 
had  had  for  some  time  a  pension  plan  with  mandatory  retirement  for 
the  partners  in  that  accounting  firm.   And,  as  I  remember  it,  most 
of  the  major  accounting  firms  had  retirement  plans  of  this  kind,  and 
pension  plans. 

I  mentioned  this  to  Mr.  Madison,  and  he  was  taken  with  the  idea 
which,  as  I  say,  to  me  is  concomitant  with  the  expansion  and  the 
building  of  a  big  major  firm.   He  took  it  up,  and  I  don't  think  any 
one  of  the  other  partners,  even  Mr.  Sutro,  let's  say  --  I  don't  want 
to  make  personal  comparisons  --  could  have  gotten  that  plan  through 
without  some  sort  of  revolt:   somebody  quitting  or  objecting. 


Hicke: 


67 

Because  after  all,  it  was  saying  to  each  of  the  senior  partners,  "At 
the  age  of  sixty-five  you  have  to  step  down;  you've  spent  your  life 
building  this  firm,  and  at  age  sixty- five  you  have  to  step  down." 

But  the  way  it's  set  up  --  I  don't  know  if  this  is  unique  or 
unusual  --  but  you  don't  have  to  step  all  the  way  down. 


McBaine:   No.   That's  part  of  the,  I  think,  success  of  drafting  the  plan. 

The  second  thing  we  did  which  was,  I've  always  thought,  really 
more  good  luck  than  good  brains  was  then  when  the  Keogh  Plan  was 
authorized  by  Congress,  we  were  fortunate  enough  to  provide  that 
each  partner  in  the  firm  had  to  contribute  the  maximum  amount  per 
missible  to  a  Keogh  Plan  in  his  name.   Now  the  reason  that's  impor 
tant  is  that  as  time  goes  on,  the  Keogh  Plan  contributions  of  the 
individual  partners  to  their  accounts  will  provide  their  retirement 
benefits.   I  don't  think  this  is  any  secret  that  shouldn't  be  in  the 
history  of  the  firm,  but  the  pension  paid  by  the  firm  to  an  advisory 
partner  is  reduced  by  the  amount  of  the  benefits  from  the  Keogh  Plan 
of  that  particular  partner. 

Now  I  don't  think  Mr.  Madison  participated  in  it  at  all,  and 
some  of  the  other  older  partners  maybe  were  in  the  Keogh  Plan  one  or 
two  years  before  they  had  to  retire.   So  what  they  had  to  deduct 
from  the  firm's  pension  was  very  minimal.   But  for  somebody  who  con 
tributes  for  fifteen  or  twenty  years  to  the  Keogh  Plan  -- 


McBaine:  --  then  the  amount  of  an  annuity  based  on  his  Keogh  Plan  contribu 
tions  when  offset  against  the  firm  pension  amount,  reduces  it,  and 
so  it  eventually  superseded  the  firm  pension  entirely.  This  saves 
us  from  any  kind  of  economic  crisis  so  far  as  the  firm  is  concerned. 

I  think  those  two  things  are,  in  a  broad  general  sense,  two 
enormously  important  things  that  Mr.  Madison  did. 

Hicke:    How  about  Mr.  [Maurice  D.  L.  ]  Fuller,  [Sr.]?  Did  you  work  with  him 
at  all? 

McBaine:   Yes,  I  did.   Mr.  Fuller  and  I  had  offices  adjoining  one  another  for 
quite  a  number  of  years.   The  chief  recollection  that  anyone  in  such 
a  position  must  have  is  that  Mr.  Fuller  never  closed  his  door  into 
the  hallway  and  whenever  he  talked  over  the  telephone  he  talked  at 
the  absolute  top  of  his  voice  [chuckles],  and  anybody  who  was  sit 
ting  in  a  room  next  to  him  had  a  hard  time  thinking  about  anything 
[both  laughing]  and  disregarding  what  he  could  plainly  hear 
Mr.  Fuller  saying. 

Mr.  Fuller  was  a  delightful  man,  one  of  the  most  charming  and 
interesting  human  beings  anyone  could  be.   He  was  a  business  lawyer, 
and  he  was  extremely  good  at  it.   I  don't  mean  to  deprecate  his 
intellectual  accomplishments  in  any  way,  but  the  average  business, 


68 


Hicke: 

McBaine: 

Hicke: 

McBaine: 


Hicke: 
McBaine : 


Hicke: 
McBaine: 


including  banks  --  he  was  bank  counsel  for  the  Bank  of  California  -- 
has  a  myriad  of  daily  problems,  and  they  need  answers  and  they  need 
them  right  now.  When  anything  of  really  underlying  significance  or 
importance  came  along,  sure,  Mr.  Fuller  had  to  slow  down  and  maybe 
get  someone  else  in  and  turn  the  job  over  to  them,  such  as  litiga 
tion  and  so  on,  but  he  turned  out  an  enormous  amount  of  legal  advice 
and  accomplishment  in  a  way  that  I  don't  think  anybody  in  the  office 
could  match. 

He  not  only  talked  loudly,  he  talked  fast?   [laughs] 
He  talked  fast.   And  he'd  cover  a  lot  of  subjects. 

He  had  a  lot  of  background  knowledge  that  he  just  carried  around  in 
his  head? 

That's  right.  That's  right.   Of  course,  he  wasn't  a  book  lawyer,  he 
wasn't  an  appellate  lawyer,  he  wasn't  any  of  those  things.   He  was  a 
business  lawyer,  and  if  you  were  a  businessman  running  a  business 
and  trying  to  make  a  profit,  he  was  ideal. 

Let's  talk  about  Gene  Prince. 
Yes,  and  Mr.  [Sigvald]  Nielson. 

Well,  Mr.  Prince  was  a  scholar.   He  was  a  very  scholarly  man,  a 
very  learned  man.   Again,  a  gentle  man,  in  the  truest  sense  of  the 
word.   He  was  considerate  of  young  and  old,  he  never  was  rough  or 
demanding.   He  never  yelled  at  anybody  in  my  experience  --  I'm  sure 
he  never  did  at  anyone  --  and  he  was  a  really  brilliant  man. 

I  had  the  pleasure  of  working  with  him  on  a  number  of  things. 
One  was  on  the  Elk  Hills  problems  for  Standard  Oil  Company  of 
California.   But  except  for  a  few  major  items  of  that  kind,  I  did 
not  have  all  that  much  professional  contact  with  him,  although  in 
those  days  the  firm  was  much  closer  socially. 

Mr.  Prince  used  to  give  a  party  each  year  at  his  ranch  down 
near  Los  Gatos ;  it  was  a  picnic.   The  whole  firm  and  all  the  part 
ners  and  associates  and  their  spouses  were  invited,  and  it  was  the 
social  highlight  of  the  year  for  the  firm.   Mr.  and  Mrs.  Prince  were 
a  wonderful  host  and  hostess,  and  everybody  had  a  marvelous  time  -- 
all  sorts  of  games,  from  horseshoes  to  softball  games  --  just  an 
all-around  good  time,  and  everybody  used  to  enjoy  that  immensely. 


Did  he  live  there? 


No.  That  was  just  a  country  place.   Mr.  and  Mrs.  Prince  lived  in 
San  Francisco. 

Mr.  Nielson  also  worked  on  Standard  Oil  Company  matters.   He 
had  been  a  tax  lawyer  and,  as  I  remember  it,  a  professor  of  tax  law. 
Again,  I  did  not  work  directly  with  him  very  much,  but  knew  him  very 


69 

well.   He  was  concerned  with  Standard's  lobbyists  in  Sacramento  and 
in  other  states  wherever  Standard  Oil  Company  had  interests. 
Mr.  Nielson  supervised  the  various  lobbyists,  answered  their  legal 
inquiries ,  kept  them  on  the  straight  and  narrow  as  far  as  conforming 
with  the  laws  was  concerned.   He  became  very  sophisticated  at  this. 

Standard  Oil  Company  had  a  paid  lobbyist,  of  course,  in  Sacra 
mento,  as  all  the  major  industries  and  companies  did,  and  we  used 
each  year  to  assign  a  young  associate  from  the  office  to  go  up  to 
Sacramento  during  the  sessions  of  the  legislature  and  assist  this 
lobbyist.   It  was  a  wonderful  experience  for  the  young  associate 
chosen  to  do  that.  We  had  to  keep  track  of  all  the  bills  that  came 
in,  read  them,  and  see  which  bills  might  affect  the  interests  of  our 
clients.   It's  gotten  to  be  such  a  herculean  job  these  days,  with 
5,000  bills  a  session  or  something,  I  don't  know  how  it's  done 
today,  but  they  managed  to  do  it  in  those  days,  and  Mr.  Nielson  was 
the  overseer  of  all  of  that.   As  a  result,  I  would  say,  he  was  a 
realist.   I  don't  think  I'd  go  so  far  as  to  say  he  was  a  cynic,  but 
he  didn't  believe  in  fairy  tales  --  let's  put  it  that  way.   [quiet 
chuckle] 

Hicke:  Would  the  Socal  lobbyist  be  full-time  for  Socal,  or  would  he  or  she 
have  other  clients?  Would  one  lobbyist  be  representing  several  oil 
companies? 

McBaine:   I'm  not  aware  of  all  the  details  of  that  kind,  but  I'd  guess  it'd 
probably  sometimes  one,  sometimes  the  other.   A  former  partner  in 
our  firm  resigned  from  the  firm  and  took  on  that  job.   His  name  was 
Al  Shults,  and  he  represented  Standard  and  several  other  firms  up 
there.   Due  to  the  training  he  received  while  working  for  the  firm 
and  under  Mr.  Nielsen's  supervision,  Mr.  Shults  became  one  of  the 
outstanding  legislative  representatives  in  the  state  of  California 
and  had  one  of  the  most  elevated  reputations  for  integrity  and  hon 
esty  and  truthfulness:   qualities  which  aren't  always  notable  among 
legislative  representatives.   [chuckles] 

Hicke:    I  know  you've  worked  with  Mr.  [Francis]  Kirkham  on  many  occasions. 

McBaine:   Yes.   I  worked  with  Mr.  Kirkham  on  many  occasions  --  really,  almost 
from  the  beginning;  I  don't  remember  exactly.   Mr.  Kirkham  was  an 
antitrust  specialist  for  as  far  back  as  I  can  remember.   I  don't 
know  whether  he  was  concerned  with  Standard  Oil  affairs  from  the 
time  he  came  into  the  firm  or  just  when  he  became  the  specialist, 
but  my  recollection  goes  back  an  awfully  long  time.   As  I  say,  I 
started  doing  Standard  Oil  work  within  a  few  months  after  I  joined 
the  office. 

He's  an  absolutely  outstanding  man:  superb  intellect,  marvelous 
personality,  ability  to  get  along  with  people,  and  a  man  full  of 
enthusiasm  for  what  he  was  doing.   His  habits  were  not  always 
regular,  in  the  sense  that  no  matter  what  time  he  started  working  in 
the  morning,  if  he  got  into  something,  he  might  well  be  there  at 
three  the  next  morning.   [chuckles]   And  he  produced,  time  after 


70 

time,  legal  miracles.   He  was  just  about  as  fine  a  --  I'd  say  a 
nonjury  lawyer,  litigator  on  these  special  subjects,  and  in  appel 
late  work  as  well,  as  there  was. 

His  legal  writing  was  excellent,  as  was  Mr.  Prince's,  they  were 
both  masters  of  it.   Their  briefs  were  not  only  technically  out 
standing,  but  artistically  outstanding,  as  a  matter  of  the  English 
language.   I  don't  read  enough  briefs  now,  but  one  of  the  things 
that  bothered  me  during  my  active  practice  was  the  fact  that  the  law 
schools  of  this  country  do  not  consider  it  a  part  of  their  responsi 
bility  to  turn  out  literate  legal  draftsmen.   I  used  to  argue  about 
this  with  my  father,  who  was  a  law  professer,  and  he  took  the  posi 
tion,  which  apparently  all  law  schools  do,  that  it's  not  their  duty 
to  teach  their  students  grammar  or  composition,  but  only  the  law. 

We  had  Mr.  Kirkham  and  Mr.  Prince  and  Mr.  Marshall,  among 
others,  a  lot  of  people  in  the  office  in  those  days  who  were  really 
first-class  draftsmen.   I  mean  their  works  were,  as  I  say,  not  only 
technically  sound  but  they  were  a  pleasure  to  read. 

Hicke:    Well,  I  would  think  also  this  penchant  for  clarity  would  contribute 
to  their  success. 

McBaine:   It  unquestionably  does.   Unquestionably  it  does. 

Hicke:    I'm  sure  we'll  be  hearing  more  about  Mr.  Kirkham  as  we  go  along. 

McBaine:   And  of  course  I  worked  on  many  things  --  I  can't  even  begin  to  enu 
merate  them  now  --  with  Mr.  Kirkham  during  the  period  when  he  was 
general  counsel  for  Standard.   I  was,  I  guess  one  would  say,  his 
next  senior  associate  in  the  Standard  group,  and  there  were  numerous 
cases  in  which  I  worked  with  him  and  for  him.   In  some  cases  I  did 
more  than  I  did  in  others,  and  in  some  cases  he  did  more  or  even  had 
other  people  working  with  him. 

But  I  had  a  long  association  with  him  and  I  enjoyed  every  bit 
of  it.   I  enjoyed  it  intellectually  and  enjoyed  it  personally.   And 
I  stress  both,  because  sometimes  you  can  enjoy  people  personally 
that  maybe  you  don't  enjoy  intellectually  and  vice  versa,  but 
Mr.  Kirkham  is  one  of  the  outstanding  lawyers  that  I've  ever  had  any 
contact  with  in  combining  those  two  qualities. 

Hicke:    Could  you  tell  me  about  Al  Tanner? 

McBaine:  Well,  Mr.  Tanner  worked  on  the  Standard  Oil  account,  but 

Mr.  Tanner's  penchant  was  somewhat  different  than  these  other  men 
I've  talked  about.   He  was,  again,  a  very  careful  and  meticulous 
person,  but  he  had  no  flare  for  the  dramatic,  let's  say.   He  gener 
ally  inherited  most  of  the  jobs  which  others  might  have  considered 
tedious  and  did  them  up  with  a  bang.   He  was  a  first-class  lawyer  in 
that  sense,  but  he  didn't  have  the  personality  and  he  didn't  have 
the  verve,  he  didn't  have  the  imagination  that  many  of  these  others 
did. 


71 

It  takes  all  kinds  of  people  to  make  a  great  firm,  so  when  I 
say  some  of  these  things  about  these  people,  I  don't  mean  they 
didn't  pull  their  weight  at  all,  but  it  does  take  different  people. 
And  --  this  is  sort  of  an  aside  --  I  think  it's  probably  always  been 
true  in  New  York  that  business  getters  are  the  most  important  people 
in  the  law  firms.   I  think  that's  less  true  here.   Certainly  I'm 
positive  that  it's  less  true  here  than  it  is  in  New  York,  and  it  may 
be  that  it's  less  true  here  than  in  most  places,  because  the  domi 
nance  of  the  business  getter  really  reduces  the  law  firm  or  the 
practice  of  the  law  by  groups  to  sort  of  a  commercial  level: 
profit-making  and  who  brings  in  the  bucks  is  the  all-important 
thing. 

I  think  with  a  major  law  firm  like  PM&S  that  has  not  been  true, 
and  I  think  if  it  had  been  true,  it  would  have  been  destructive. 
And  I  think  that's  true  of  all  major  firms.   A  great  deal  of  the 
business  that  comes  in  to  lawyer  "X"  in  the  firm  comes  in  partly 
because  of  lawyer  "X"  but  mainly  because  lawyer  "X"  is  a  member  of 
PM&S  and  is  backed  up  by  PM&S  and  the  reputation  that  PM&S  has 
established  over  the  years,  so  that  it's  the  firm  that  really 
attracts  the  business,  except  in  very  special  cases. 

Hicke:    But  then  it's  the  good  work  of  the  members  of  the  firm  which  makes 
the  reputation. 

McBaine:   That's  right.   And  somebody's  got  to  do  that  work,  and  the  more  a 
man  is  engaged  in  drumming  up  business,  if  you  will,  by  attending 
bar  association  meetings  and  community  group  meetings  and  so  forth 
and  so  on,  the  less  work  he  can  really  do.   You  might  have  the  most 
brilliant  appellate  lawyer,  for  example,  where  the  knowledge  of  the 
law  and  all  the  details  of  it  become  supremely  important,  who 
doesn't  have  the  personality  to  join  such  and  such  an  organization 
and  become  one  of  the  boys  and  slap  everybody  on  the  back,  but 
without  that  appellate  lawyer,  the  firm  couldn't  win  these  cases. 

My  theory  always  was  and  still  is  that  if  you're  going  to  have 
a  great  firm  as  an  institution,  you  have  to  recognize  the  services 
of  the  appellate  lawyer  I  was  just  speaking  about.   I'm  not  saying 
all  appellate  lawyers  are  like  that;  I'm  saying  you  might  have  one 
like  that  who's  absolutely  invaluable  to  the  firm  and  yet  is,  let's 
say,  so  shy  that  he's  virtually  unknown  outside  the  firm.   And  it's 
always  been  true  with  this  firm:   we  have  recognized  these  varied 
skills  and  varied  contributions,  and  I'm  convinced  that's  part  of 
the  reason  we're  where  we  are  today. 

Hicke:    All  these  talents  and  skills  are  complementary,  so  that  you  don't 
have  ten  experts  of  one  variety  and  none  of  the  others. 


McBaine:   Yes.   Exactly. 


72 


IV  MAJOR  RESPONSIBILITIES 


Elk  Hills 


Hicke: 


McBaine: 


Hicke: 


McBaine: 


Okay.  Well,  maybe  we  should  get  you  back  to  your  beginning  respon 
sibilities  and  what  happened  next. 

When  I  was  switched  to  Mr.  Madison  from  Mr.  Bennett  and  to  the  Stan 
dard  Oil  account,  I  think  in  a  matter  of  weeks,  I  was  called  in  by 
Mr.  Prince  because  the  Standard  Oil  Company  of  California  had  a 
problem  with  Elk  Hills.   [looking  through  papers] 


The  general  agreement  had  already  been  written? 
talking  about? 


Is  that  what  we're 


Yes.   [still  looking  through  papers]  The  so-called  Unit  Plan  Con 
tract. 

Now  Elk  Hills  was  a  Naval  Petroleum  Reserve.   I  think  I  can 
best  read  out  of  a  brief  that  I  filed  in  the  Ninth  Circuit  on  an  Elk 
Hills  matter  and  I'll  quote: 

Naval  Petroleum  Reserve  No.  1.  The  reserve  was  estab 
lished  in  1912  and  was  located  in  the  Elk  Hills  in  Kern 
County,  California.   At  the  turn  of  the  century,  govern 
ment  lands  in  the  West  were  rapidly  being  turned  over  to 
private  ownership.   At  the  same  time  there  was  a  growing 
realization  of  the  importance  of  oil  for  the  navy,  which 
was  then  changing  from  coal-  to  oil-burning  ships. 
Accordingly,  President  [William  Howard]  Taft  withdrew 
large  tracts  of  potentially  oil-bearing  public  lands  in 
California  and  Wyoming  from  eligibility  for  private  owner 
ship,  and  in  1912  set  aside  Naval  Petroleum  Reserve  No.  1 
by  Executive  Order.  While  the  Executive  Order  estab 
lishing  the  reserve  affected  the  future  use  and  disposi 
tion  of  the  government  lands  included  in  the  reserve,  it 
had  no  effect  on  the  privately  owned  land,  and  the  owners 
of  those  lands  remain  free  to  use  or  dispose  of  them  as 
they  saw  fit.   In  1944  there  were  approximately  44,000 


Hicke: 

McBaine: 


Hicke: 
McBaine: 


73 

acres  within  the  reserve.   Approximately  one-fifth  were 
owned  by  Standard  and  the  remainder,  approximately  four- 
fifths,  by  the  navy.  The  Standard  lands  were  not  [and  are 
not]  in  one  block,  but  are  checkerboarded  throughout  the 
reserve.  Also  in  1944,  there  were  [and  still  are]  three 
geologic  zones  underlying  the  reserve  known  to  be  commer 
cially  productive  of  oil  and  of  gas. 

Now  the  reason  for  that  is  this :   you  may  remember  that  when 
the  railroads  were  built,  the  lands  were  handed  out  to  the  railroads 
and  for  schools  in  Calfornia  --  mostly,  I  think,  they  were  school 
lands.   Alternate  sections  were  given  to  the  states  for  school  pur 
poses.   This  means  that  you  wound  up  with  a  map  looking  like  a 
checkerboard,  and  every  red  square  would  belong  to  the  government 
and  every  black  square  would  belong  to  private  interests.   Maybe  it 
was  sold  to  raise  money  for  the  schools,  for  example. 

The  net  result  was  that  you  had  the  government  sitting  there 
with  all  these  checkerboarded  sections,  and  their  policy  was  to  pre 
serve  the  Elk  Hills  Reserve  to  produce  oil  for  use  by  the  navy  in 
times  of  war.   Long  after  1912,  the  air  force  came  along,  and  the 
air  force  was  using  enormous  amounts  of  petrol,  as  well  as  the  navy 
and  all  the  mechanized  vehicles  of  the  army.  While  the  navy  had 
administrative  control  over  it,  the  reserve  really  was  for  the  armed 
forces.   It,  in  a  sense,  had  to  be,  since  all  of  them  required  oil. 

Standard,  on  the  other  hand,  had  lands  on  which  they  had  dis 
covered  oil  and  they  wanted  to  produce  the  oil,  but  the  navy  said, 
"No.   We  don't  want  you  to  do  that,  because  if  you  produce  oil  from 
your  section  of  land,  which  is  a  mile  square,  you  will  drain  oil 
from  one  or  more  of  our  sections,  and  we  don't  want  that.   Any  oil 
you  produce  will  be  partly  ours." 

Were  they  also  worried  about  slant  drilling? 

No.   That  would  have  been  a  trespass.   To  slant  drill  into  somebody 
else's  lands  would  have  been  a  trespass.   But  to  simply  "suck  on 
your  straw"  --  it's  like  you  shared  a  milkshake  with  your  friends, 
and  you  put  your  straw  in  your  side  of  the  milkshake  and  began 
sucking;  if  he  didn't  start  sucking  pretty  quick,  [both  chuckle]  the 
whole  thing  would  be  gone. 

Excellent  description. 

This  was  a  big  problem.   So  the  parties  then  got  together,  and  they 
entered  into  a  unit  plan  contract  in  which  it  was  agreed  that  the 
navy  would  control  the  rate  of  production  from  the  land  and  that 
Standard  would  be  allowed  to  withdraw  a  certain  amount  of  oil,  no 
matter  where  it  came  from,  as  compensation  for  entering  into  the 
contract.   They  wouldn't  bother  about  that  --  which  section  it  was 
sucked  from  --  until  it  got  to  be  a  certain  amount  of  oil,  and  then 
after  that,  Standard  could  produce  only  enough  oil  each  year  to  pay 
their  out-of-pocket  costs  in  the  reserve.   But  apart  from  that, 


Hicke: 
McBaine: 


74 

after  this  initial  production,  the  reserve  would  be  essentially  shut 
in. 

Well,  then  problems  began  to  arise.   For  example,  if  as  time 
went  on,  new  wells  were  drilled  with  the  consent  of  the  navy  to  find 
out  how  much  oil  was  in  the  reserve,  what  the  navy  could  count  on, 
and  new  wells  were  drilled  not  for  production  but  for  information, 
then  you  might  have  a  question  as  to,  "Well  now,  does  this  under 
ground  pool  of  oil  I'm  drilling  into  extend  outside  the  boundary  of 
the  reserves?"  If  so,  another  question  arose.   No  matter  whether 
the  well  was  on  private  land  or  government  land,  the  navy  would  say 
right  away,  "We  want  that  area  in  the  reserve,"  and  Standard's 
interests  would  be  to  say,  "No,  it  isn't  part  of  the  reserve.   It 
shouldn't  be  in  the  reserve.   You  only  drew  the  reserve  boundaries 
here." 

They  would  want  to  purchase  that,  or  lease  that? 

No.   First  you  had  a  contractual  argument,  as  to  whether  the  lands 
had  to  be  included  under  the  Unit  Plan  Contract.   Then  you  had  a 
legal  argument  of  condemnation  --  whether  they  wanted  to  condemn  it. 
Then  you  had  another  question  if  somebody  else  discovered  a  well. 
There  were  lots  of  people  drilling  in  Elk  Hills  around  the  reserve, 
and  if  somebody,  not  Standard  or  the  navy,  drilled  a  well  two  or 
three  miles  away  from  the  boundaries  of  the  reserve  and  discovered 
oil,  query:   were  they  producing  from  a  pool  which  -- 


McBaine:   --  extended  within  the  reserve?   And  if  so,  then  of  course  the  navy 
again  wanted  to  do  something  about  it  to  protect  their  interests  in 
the  reserve.   So  there  was  a  constant  succession  of  questions  that 
arose  all  during  the  course  of  the  history  of  this  thing.   All 
during  my  time,  which  was  twenty-five  years  or  thirty  years,  a  con 
stant  succession  of  questions  arose  concerning  this  Reserve. 

Hicke:    Were  there  suits  or  were  these  all  questions  negotiated? 

McBaine:   Both.  There  were  long  negotiations  and  arguments  and,  oh,  constant 
travels  back  and  forth  to  Washington  and  to  Denver.   The  Office  of 
Naval  Petroleum  Reserves  was  in  Denver  for  quite  a  number  of  years, 
and  we'd  make  half  a  dozen  trips  a  year  to  Denver  over  various  mat 
ters;  then  the  office  was  moved  back  to  Washington  again,  and  we 
made  trips  to  Washington  all  the  time. 

The  difficulties  in  administering  the  Elk  Hills  contract 
stemmed  from  what  was  known  as  the  Teapot  Dome  Scandal  in  the  early 
1920s,  during  the  administration  of  President  Harding.   In  1921 
Harding  transferred  control  of  the  naval  oil  reserves  at  Teapot 
Dome,  Wyoming,  and  at  Elk  Hills  from  the  navy  to  the  Interior 
Department.   The  Secretary  of  the  Interior,  Albert  B.  Fall,  then 
issued  oil  and  gas  leases  without  competitive  bidding  in  Teapot  Dome 
to  oilman  Harry  F.  Sinclair  and  in  Elk  Hills  to  Edward  L.  Doheny. 


75 

After  a  Senate  investigation  it  was  found  that  Sinclair  and  Doheny 
had  both  "loaned"  substantial  sums  of  money  to  Fall,  interest  free. 
The  leases  were  cancelled,  the  reserves  were  transferred  back  to 
navy  control,  and  as  a  result  everything  Socal  did  in  administering 
the  Unit  Plan  Contract  at  Elk  Hills  was  subjected  to  the  most  minute 
inspection  by  the  navy,  Congress  and  the  media. 

The  whole  subject  of  naval  petroleum  reserves  became  sort  of 
the  Watergate  of  its  time,  if  you  will.   I  mean,  everytime  the  Stan 
dard  Oil  Company  wanted  to  do  anything  at  Elk  Hills  --  and  almost 
everything  involving  this  thing  depended  on  highly  technical  and 
scientific  information  and  also  involved  factual  situations  which 
were  complex  and  difficult  to  state  and  to  make  people  understand  -- 
immediately  somebody  would  rise  up  again  and  say,  "Oh,  they're 
trying  to  steal  another  naval  petroleum  reserve." 

So  the  whole  business  for  twenty-five  years  was  carried  on  in  a 
climate  of  anything  but  intellectual  objectivity.   Somebody  would 
make  a  political  stump  speech  everytime  we  had  a  question  of  this 
kind.   And  as  I  say,  within  I  think  a  few  weeks,  or  maybe  a  couple 
of  months  at  the  most,  after  I  was  assigned  to  the  Standard  Oil 
account,  the  secretary  of  the  navy  published  an  announcement  that  he 
was  enlarging  the  Elk  Hills  Reserve  No.  1  by  taking  in  thousands  of 
acres  adjoining  the  reserve,  and  without  saying  boo  to  Standard  or 
anybody  else  who  owned  lands  in  this  area. 

Well,  as  I  say,  Mr.  Prince  called  me  in  to  discuss  this 
problem.   There  was  present  a  vice  president  of  Standard  at  the  time 
named  Floyd  Bryant,  who  was  in  charge  of  the  company's  interests  in 
Elk  Hills.   Incidentally  --  another  small-world  bit  --  he  was  one  of 
the  Rhodes  Selection  Committee  for  the  Western  District  who  had 
selected  me  for  a  Rhodes  Scholarship  in  1932.   He  was  a  former 
Rhodes  scholar  himself.   So  here  in  '47  I  came  back  to  him  and  found 
myself  working  with  him  on  this  Elk  Hills  matter. 

In  any  case,  we  instigated  a  hearing  before  the  House  Armed 
Services  Committee  on  this  matter.   The  chairman  of  the  House  Armed 
Services  Committee  was  Representative  Carl  Vinson  of  Georgia,  who 
was  the  watch-dog  of  the  naval  petroleum  reserves,  and  he  made  a 
holy  crusade  out  of  his  entire  tenure.   Possibly  one  shouldn't  say 
things  about  the  dead,  but  I  am  convinced  it  was  true  that  he  suc 
cumbed  to  Lord  Acton's  dictum  that  all  power  corrupts  and  absolute 
power  corrupts  absolutely.   He  ran  the  House  Armed  Services  Com 
mittee  with  an  absolute  iron  hand.   It  was  simply  a  one-man  com 
mittee;  nobody  else  on  it  had  any  say,  and  he'd  punish  anybody  that 
even  thought  of  taking  an  independent  position. 

He  was  obsessed  with  the  idea  that  the  Standard  Oil  Company 
might  get  a  barrel  of  oil  out  of  the  Elk  Hills  Reserve  that  it 
wasn't  entitled  to,  or  even  if  it  was  entitled  to  it.   He  thought 
the  naval  petroleum  reserves  were  the  single  salvation  of  the  secu 
rity  of  the  United  States:   an  extremely  difficult  man. 

Hicke:    Would  you  say  he  got  a  lot  of  mileage  out  of  that? 


76 


McBaine: 


Hicke: 
McBaine: 


Yes.   Oh,  yes.   Sure.  He  got  enormous  press  coverage  out  of  it,  and 
he  rode  it  for  all  it  was  worth. 

I  won't  go  into  details,  but  he  boobytrapped  Standard  one  time. 
Standard  wanted  a  certain  revision  of  the  contract.   They  proposed 
the  revision  to  Mr.  Vinson,  because  of  course  you  had  to  talk  to  the 
chairman  of  the  committee,  you  wouldn't  dare  talk  to  anybody  else, 
and  he  said,  "Well,  I'll  give  you  a  hearing  before  the  committee  on 
your  proposal.   I  don't  think  I  like  it,  but  I'll  give  you  a  hearing 
before  the  committee." 

So  the  company  and  we,  the  lawyers,  went  to  work  on  this  thing. 
We  prepared  this  proposal  --  it  took  us  about  a  year  to  do  it  -- 
with  engineering  and  other  studies  and  sent  forty  or  fifty  copies  of 
the  proposal  back  to  the  committee  several  months  before  the 
hearing;  actually  we  sent  the  forty  or  fifty  copies  to  the  chairman 
for  distribution  to  the  members  of  the  committee,  so  that  they'd  all 
have  this  thing  well  in  advance  of  the  hearing  and  understand  what 
it  was  all  about. 

We  got  back  to  Washington  to  participate  in  the  hearing  and 
make  our  case  before  the  committee,  and  were  told  later  by  a  member 
of  the  committee  that  the  first  time  he  had  ever  seen  the  report 
which  we  were  presenting  that  day  was  on  that  morning  when  he  came 
into  the  hearing  and  took  his  seat  on  the  committee;  the  volume  we 
had  prepared  was  on  the  bench  in  front  of  his  place.   Otherwise  he 
had  not  read  one  word  of  the  whole  thing. 

The  committee  session  then  began.   The  chairman  called  in  the 
committee  to  order  and  said,  "Before  there's  any  testimony,  I'd  like 
to  read  a  statement."  He  then  read  a  statement,  which  was  about 
thirty  minutes  long,  in  which  he  blasted  the  proposal  as  iniquitous 
and  everything  else  you  can  think  of,  condemned  it  from  top  to 
bottom.   Of  course,  the  members  of  the  committee  didn't  know  what  he 
was  talking  about.   They  couldn't  follow  him  because  they  didn't 
have  our  presentation  of  our  proposal,  so  they  didn't  even  know  what 
the  proposal  was.   So  when  I  say  that  power  corrupted,  that's  what  I 
mean.  That's  the  kind  of  thing.   [quiet  chuckle]  I  think  you  can 
imagine  that  hearings  like  this  produced  a  lot  of  interesting  ques 
tions  over  the  course  of  twenty-five  or  thirty  years. 

Interesting  is  probably  a  polite  word  [quiet  laughter]  for  the  kinds 
of  questions  you  had  to  deal  with. 

That's  right.  The  only  other  incident  that  might  be  mentioned  in  a 
history  such  as  this  regards  this  first  session  where  the  secretary 
of  the  navy  had  simply  unilaterally  announced  an  expansion  of  the 
reserve,  and  so  many  lands  belonging  to  Standard  and  other  private 
owners  had  been  taken  into  the  reserve.  When  we  went  back  to 
Washington  for  the  hearing  before  the  House  Armed  Services 
Committee,  I  was  the  lawyer  that  went  along  with  Mr.  Bryant,  and  a 
staff  man  he  had  with  him.   Mr.  Prince  sent  me  back  there. 
Mr.  Prince  had  reached  the  age  where,  I  think,  he  didn't  jump  at 


77 

every  chance  to  get  on  an  airplane  and  fly  across  the  country; 
that's  a  characteristic  of  age  in  the  lawyers  involved,  except  for 
Mr.  Kirkham.  He'd  still  go  anyplace,  anytime.   [both  laugh]  But 
mostly  as  the  lawyers  got  older,  they  were  happy  to  delegate  that  to 
some  younger  people. 

So  I  went  with  eagerness  and,  I  think,  on  only  about  one  day's 
notice;  we  had  very  little  time  at  all.   I  got  a  copy  of  the  Consti 
tution,  and  I  was  looking  at  the  copy  of  the  Constitution.   There  is 
a  provision  in  there  that  says  something  about  the  Congress  of  the 
United  States  shall  decide  what  shall  be  done  with  public  lands  of 
the  United  States,  or  something  of  that  nature.*  I  don't  remember 
the  exact  phrase  in  the  thing,  but  it  covered  this  situation,  and 
the  secretary  of  the  navy  had  simply  arrogated  the  power  to  himself. 
We  really  made  the  point;  we  threw  this  up  to  Mr.  Vinson  and  his 
committee  that  here  the  secretary  of  the  navy  was  poaching  on  their 
prerogatives . 

Hicke:    That  might  have  appealed  to  him. 

McBaine:   That  appealed  to  them  and,  in  fact,  he  directed  the  secretary  of  the 
navy  to  withdraw  that  order  forthwith  and  gave  him  quite  a  dressing 
down.   [both  laugh]   That  was  the  first  time  I'd  ever  seen 
Mr.  Vinson. 

And  one  of  the  most  interesting  things  is  that  one  of  the  mem 
bers  of  the  committee  at  that  time,  the  first  time  I'd  ever  heard  of 
him,  was  Congressman  Lyndon  B.  Johnson  from  Texas.   I  well  remember 
that  during  the  course  of  a  presentation  of  this  argument  on  the 
Constitutional  point,  which  set  it  up  for  Mr.  Bryant  to  make  the 
argument  that  we  were  looking  to  this  committee  to  decide  these 
questions,  not  to  the  secretary  of  the  navy,  I  got  into  a  discussion 
with  Johnson.   I  won't  say  it  was  an  argument  --  I  don't  remember 
exactly  the  technical  points  --  but  I  do  remember  that  Johnson 
jumped  on  me  about  something,  and  I  had  an  exchange  with  him  for 
four  or  five  passages  back  and  forth.   I  wish  I  could  remember  the 
exact  details,  but  I  don't,  but  anyway  I  really  succeeded  in  main 
taining  my  position.   He  said,  "What  if  so  and  so?"  and  I  said, 
"Well,  in  that  case  the  matter  would  come  right  back  to  you  for 
decision." 

Hicke:    Again  because  of  the  Constitution? 

McBaine:   Again,  because  basically,  of  this  same  argument.   But  he  was  so 

pleased  about  that  idea  that  he  dropped  his  interrogation.   [both 
laugh] 


*     Article  IV,  Section  3(2):   The  Congress  shall  have  Power  to 
dispose  of  and  make  all  needful  Rules  and  Regulations  respecting  the 
Territory  or  other  Property  belonging  to  the  United  States  .  .  . 


78 

So  in  retrospect,  I  thought  I  was  very  fortunate  that  I  didn't 
get  run  over  completely  by  Lyndon  B.  Johnson   [both  continue  to 
laugh]  He  ran  over  a  lot  of  people  before  he  finished. 

Hicke:    And  probably  not  too  many  people  could  say  they  held  their  own  in  an 
exchange  with  him. 

McBaine:   So  anyway,  for  a  long,  long  time  Elk  Hills  was  a  continuing  legal 
problem.   The  odd  thing  is  that  when  in  1973  with  the  formation  of 
OPEC  [Organization  of  Petroleum  Exporting  Countries]  and  the 
shortage  of  oil,  which  led  to  the  lines  you  remember  at  the  service 
stations  and  filling  stations  -- 

Hicke:    I  remember  well. 

McBaine:   --  eventually,  and  I  suppose  partly  because  of  Mr.  Vinson's  death, 
because  I  think  he  was  dead  by  that  time,  the  government  of  the 
United  States  changed  its  position  entirely.   One  of  the  basic 
things  they've  done  [chuckle]  is  they're  producing  oil  from  Elk 
Hills  now  and,  of  course,  when  they  allow  production  of  the  oil, 
Standard  gets  its  share. 

So  all  of  this  haggling  over  the  years  finally  resulted  in  Elk 
Hills  being  opened  up,  so  to  speak,  and  the  government  has  been 
taking  its  share  of  the  oil  and  piping  it  down  to  the  Gulf  Coast  and 
pumping  it  down  into  depleted  salt  domes  underneath  the  Gulf  of 
Mexico  as  a  strategic  petroleum  reserve.   In  other  words,  they  are 
getting  oil  closer  to  the  Middle  West  and  the  East  Coast  and  not 
leaving  it  clear  out  here  on  the  West  Coast,  where  it's  pretty  dif 
ficult  to  move  it.   You  have  to  take  it  clear  down  to  Southern 
California  to  get  it  through  a  pipeline;  you  can't  run  a  pipeline 
over  the  Sierra  and  the  Rockies.   So  all  of  these  epic  struggles 
that  we  had  over  this  thing  [hearty  chuckle]  are  a  thing  of  the 
past. 

Hicke:    But  it  also  paid  off  in  the  long  run,  in  a  sense,  didn't  it? 

McBaine:   Oh,  yes.   Oh,  yes. 

Hicke:    Does  that  finish  Elk  Hills,  at  least  for  the  moment? 

McBaine:   I  think  so.   I  think  that  any  more  would  be  not  of  any  general 
interest . 


Reporting  to  Senior  Firm  Members 
[Interview  continued:   June  26,  1986]## 


Hicke:    I  thought  we  might  just  start  this  afternoon  by  my  asking  you  a 
little  bit  about  how  you  reported  to  other  senior  members  of  the 
firm,  what  you  reported  and  how  much  they  wanted  to  know. 


79 

McBaine:   Well,  that  differed,  depending  on  the  senior  member  of  the  firm. 
Different  men  had  different  habits  and  a  different  method  of 
approach.  As  I  told  you,  the  first  major  matter  that  I  had  when  I 
came  into  the  firm  was  the  Elk  Hills  expansion  that  we  talked  about 
last  time,  and  I  reported  to  Mr.  Prince  on  that,  because  Mr.  Prince 
had  been  the  attorney  in  a  suit  involving  the  title  to  some  of  the 
lands  in  the  Elk  Hills  field  some  time  before  and,  therefore,  had 
the  background  on  the  whole  Elk  Hills  situation,  whereas 
Mr.  Madison,  not  having  been  a  Standard  Oil  lawyer,  did  not  have  the 
background. 

As  soon  as  that  matter  was  over,  I  began  reporting  to 
Mr.  Madison  as  the  new  general  counsel  to  the  Standard  Oil  Company. 
Mr.  Madison's  idea  was  that  --  I'm  not  sure  whether  it  was  spoken  or 
unspoken  --  he  did  not  want  to  be  kept  apprised  of  all  details  of  a 
given  matter.   He  had  more  than  he  could  possibly  do  on  that  kind  of 
a  basis.   He  wanted  to  know  what  the  important  and  significant 
developments  were  and  that's  all.   That  meant  that  the  younger 
lawyer  who  was  working  on  a  given  matter  had  to  use  his  judgment  as 
to  what  was  significant  and  what  wasn't. 

I  would  say  --  I  think  I've  said  before  --  that  I  thought 
Mr.  Madison  was  the  finest  administrative  head  of  a  law  firm  one 
could  possibly  be,  and  part  of  that  ability  of  his  was  the  ability 
to  delegate  and  to  keep  from  being  overwhelmed  by  a  lot  of  minutia. 
I'm  sure  that  if  he,  for  some  reason  or  another,  lost  confidence  in 
a  younger  lawyer  that  he'd  assigned  a  given  job,  he'd  monitor  it 
more  closely  and  if  necessary  make  a  change.   But  as  long  as  the 
client  or  the  representative  of  the  client  with  whom  the  younger 
lawyer  was  working  was  satisfied  and  made  no  objections  and  so 
forth,  Mr.  Madison  was  happy  to  have  the  younger  lawyer  do  every 
thing  he  could  do. 

Hicke:    Now  as  you  developed  your  own  group  of  young  lawyers  working  with 
you  and  then  became  general  counsel,  what  were  your  feelings  about 
how  much  they  should  report? 

McBaine:   Well,  as  far  as  I'm  concerned,  I  approved  thoroughly  of 

Mr.  Madison's  method  of  operations  and  tried  to  model  myself  on  it. 
It  was  an  object  lesson  for  me,  and  I  think  I  was  very  fortunate  to 
have  the  training  in  that  regard. 

Hicke:    Because  you  didn't  have  to  spend  all  your  time  supervising,  you  were 
able  to  do  a  lot  of  work? 

McBaine:   Yes.   I  don't  know  that  I  can  give  an  accurate  estimate  of 

Mr.  Madison's  time,  but  he  did  not  limit  himself  to  Standard  Oil 
affairs.  When  he  became  general  counsel  to  Standard,  he  had  a 
number  of  important  lifelong  clients,  and  he  continued  to  represent 
them  and  supervise  their  work  as  well.   So  all  the  more  reason  why 
he  had  to  build  up  a  competent  staff  of  attorneys  in  the  office  to 
service  the  Standard  Oil  account.   All  the  more  reason  why  he  had  to 
rely  on  them  not  to  overwhelm  him  with  a  lot  of  intricate,  really 


immaterial  facts, 
things . 


80 


He  only  wanted  to  know,  as  I  say,  the  important 


The  same  was  true  of  myself,  and  I  think  true  of  every  one  of 
the  men  that  I've  known  who  had  the  job.   Mr.  Kirkham  was  the  same 
way.  All  of  us  did  work  other  than  Standard  Oil  work.   I'm  going  to 
discuss  one  or  two  cases  in  which  I  participated  that  had  nothing  to 
do  with  Standard.   But  it  varied.   Certainly  Standard  took  the  great 
majority  of  the  time  of  all  of  us  on  that  account. 

Hicke:    Well,  thank  you  for  answering  the  question. 


Civil  Air  Transport  Case 


Hicke:    Now,  I  think  we're  about  ready  for  the  Civil  Air  Transport  case. 

McBaine:   All  right.   Well,  after  my  experience  in  the  Elk  Hills  expansion 
matter,  the  next  major  item  that  I  remember  came  along  when  I 
received  a  telephone  call  from  a  friend  who  had  been  an  associate  of 
mine  in  O.S.S.  during  the  war  and  was  then  a  lawyer  in  the  office  in 
Washington,  D.C.  of  Thomas  G.  Corcoran,  "Tommy  the  Cork,"  of  New 
Deal  fame.   He  retained  me  in  connection  with  the  matter  that  I'll 
tell  you  about. 

When  the  Chinese  Communists  drove  Chiang  Kai-shek  and  the  Chi 
nese  Nationalists  off  the  mainland  of  China  to  Taiwan,  there  were 
two  Chinese  airlines  operating  on  the  mainland:   China  National  Avi 
ation  Corporation  and  Civil  Air  Transport  Corporation  (CNAC  and 
CATC).   In  addition,  U.S.  General  Claire  Chennault  had,  as  you  may 
remember,  been  commanding  and  operating  a  group  of  American  fliers 
in  China  before  and  during  World  War  II  called  the  Flying  Tigers. 
At  the  end  of  the  war,  he  had  organized  a  civilian  airline  in  China 
principally  to  carry  freight  in  China  called,  I  think,  Civil  Air 
Transport  (CAT). 

In  order  to  avoid  the  Chinese  Communists  taking  over  all  of  the 
assets  of  the  two  domestic  Chinese  airlines  I  referred  to,  CNAC  and 
CATC,  as  they  expanded  over  China,  the  Chiang  Kai-shek  government 
sold  all  of  the  assets  of  those  two  airlines  to  a  U.S.  corporation 
organized  by  General  Chennault.   The  better  known  part  of  the  story 
involved  the  planes  of  those  two  airlines,  which  the  pilots  of  the 
airlines  flew  out  of  mainland  China  --  they  flew  all  of  them  out,  as 
far  as  I  know  --  and  flew  them  to  Hong  Kong  to  prevent  their  sei 
zure.  They  were  sitting  in  Hong  Kong.   However,  that's  not  a  part 
of  my  story. 

My  story  comes  in  because  the  two  Chinese  airlines  had  several 
million  dollars  in  banks  in  San  Francisco  plus  about  a  million  dol 
lars  worth  of  spare  engines  and  spare  parts  at  San  Francisco  air 
field.   The  question  was:   to  whom  did  those  assets  belong?  The 


81 

Chinese  Communist  government  made  a  claim  on  the  banks  here  in  San 
Francisco  for  those  monies  and  also  for  the  assets  at  San  Francisco 
airport:   the  engines  and  spare  parts. 

Interestingly  enough,  the  attorney  in  fact  for  the  Chinese 
Communist  government  in  the  U.S.  was  Frederick  Vanderbilt  Field,  who 
was  well  known  in  University  of  California  circles  because  he  was 
one  of  the  founders,  I  believe,  of  the  Institute  for  Pacific  Rela 
tions,  which  involved  a  number  of  University  of  California  officials 
and  which  attracted  people  interested  in  foreign  affairs.   I'm  not 
sure  my  memory  is  correct,  but  I  believe  that  President  [Robert 
Gordon]  Sproul  was  at  one  time  a  member  of  the  board  of  the  Insti 
tute  of  Pacific  Relations.   That  may  not  be  correct,  but  the  Univer 
sity  of  California  was  involved  with  it.   There  were  others  who  sub 
sequently  thought  that  the  Institute  of  Pacific  Relations  was 
essentially  a  subversive  group  manipulated  by  Mr.  Field,  who  was  a 
well-known  Communist  sympathizer. 

In  any  case,  Field  on  behalf  of  Communist  China  made  a  demand 
for  all  of  this  money  and  these  engines  and  spare  parts,  and 
Mr.  Corcoran 's  office  retained  me  to  make  a  counter-demand  and  to 
recover  these  assets,  get  the  title  to  them  cleared,  and  get  the 
money  and  get  the  engines  and  spare  parts. 

Hicke:    On  behalf  of  Chiang  Kai-shek  or  General  Chennault? 

McBaine:   On  behalf  of  General  Chennault 's  airline,  which  had  bought  these 
assets  from  the  Chiang  Kai-shek  Chinese  government.   Well,  the 
problem  instantly,  of  course,  was  how  in  the  world  could  we  prove 
title?   I  should  say  before  we  get  into  this  that  approaching  the 
banks  was  useless,  because  the  banks  followed  their  normal  proce 
dure,  which  it  seemed  to  me  they  took  great  pleasure  in  doing,  of 
saying,  "Well,  we  have  conflicting  demands;  so  we  won't  pay  either 
one,  we'll  just  hold  the  money."   [chuckles]   So  the  longer  that 
went  on,  the  happier  they  were.   [both  laugh]. 

As  I  say,  the  problem  immediately  arose,  how  in  the  world  do 
you  prove  in  a  court  of  law  --in  the  federal  district  court  here  in 
San  Francisco  --  a  title  passed  on  the  mainland  of  China  when  the 
Chiang  Kai-shek  government  was  fleeing  from  the  mainland  of  China, 
actually  on  the  move  to  Taiwan?   It  was  impossible  at  that  point,  of 
course,  for  any  American  lawyer  or  investigator  to  get  a  visa  to  go 
into  mainland  China  to  look  for  any  evidence  or  obtain  any  evidence, 
and  almost  surely  any  crucial  documents  would  be  impossible  to 
locate.   So  the  question  was  what  in  the  world  to  do. 

Well,  that  drove  me  to  the  library.   After  plowing  through  the 
books  for  a  while,  I  came  up  with  what's  known  as  the  Act  of  State 
Doctrine,  and  solved  the  problem  in  this  way.   What  the  Act  of  State 
Doctrine  required  was  that,  in  the  first  place,  the  United  States 
government  had  to  continue  to  recognize  the  Chiang  Kai-shek  govern 
ment  as  the  legal  government  of  China,  which  it  did,  of  course,  for 
some  months  after  the  takeover  by  the  Chinese  Communists.   If  the 


Hicke: 

McBaine: 


82 

U.S.  had  ever  recognized  the  Chinese  Communists  and  withdrawn  their 
recognition  from  Chiang  Kai-shek,  it  wouldn't  have  been  possible  to 
apply  this  Doctrine.   So  there  was  some  urgency  about  the  matter. 
But,  it  worked  this  way. 

First  of  all,  I  got  the  Chinese  ambassador  in  Washington  to 
write  a  letter  to  the  secretary  of  state  of  the  United  States 
informing  him  that  the  government  of  China  had  on  such  and  such  a 
date  sold  all  of  the  assets  of  these  two  airlines  to  General  Chen- 
nault  and  his  American  company,  the  ambassador  saying  to  the  secre 
tary  of  state,  "I  understand  there  is  a  controversy  over  this  matter 
in  the  courts  of  the  United  States,  and  I  would  appreciate  it  if  you 
would  call  the  facts  I've  stated  to  you  above  to  the  attention  of 
the  court." 

Next  the  State  Department,  accepting  the  [Nationalist]  govern 
ment  of  China  as  the  legal  government  of  China,  formally  accepted 
the  word  of  the  Chinese  ambassador  as  true.   This  turned  the  whole 
matter  into  an  affair  of  state  --  of  foreign  relations  between  sov 
ereign  states.   With  the  three  branches  of  the  government  that  we 
have,  legislative,  executive,  and  judicial,  the  conduct  of  foreign 
affairs  is  a  question  within  the  competency  of  the  executive  branch. 
This  took  it  out  of  the  judicial  branch  of  the  government  and  made 
it  a  diplomatic  matter  --  an  affair  of  state  --  to  be  decided  by  the 
executive  branch. 

Now  I  made  the  arrangements  with  the  State  Department  rather 
easily,  because  the  assistant  secretary  of  state  for  the  Far  East  at 
that  time  was  Dean  Rusk,  who  was  a  classmate  of  mine  at  Oxford 
[chuckles].   He  later  became  secretary  of  state,  of  course,  and 
actually  during  the  war  had  been  in  the  China-Burma-India  theater  in 
Delhi  as  a  staff  officer.   So  I  arranged  this  all  with  Dean  Rusk. 

When  the  State  Department  got  this  letter,  the  State  Department 
then  addressed  a  letter  to  the  attorney  general  of  the  United  States 
and  said,  "Dear  Sir,  we  have  received  this  letter  from  the  Chinese 
ambassador.  We  accept  the  Chinese  ambassador's  statements  as  true. 
Will  you  please  notify  the  Federal  District  Court  for  the  Northern 
District  of  California?"  The  attorney  general  of  the  United  States 
then  wrote  a  letter  to  the  judge  in  the  Federal  District  Court  in 
Northern  California  and  recited  the  whole  story  to  him,  whereupon 
the  district  judge  held  a  hearing  of  the  court  and  announced  that 
the  matter  had  been  taken  out  of  his  hands  and  that  the  United 
States  recognized  the  Nationalist  Chinese  government,  they  recog 
nized  the  truth  of  the  statements  made  by  the  Chinese  government, 
and  the  property  belonged  to  General  Chennault's  airline. 

So,  in  effect,  the  court  had  no  jurisdiction. 

They  had  no  jurisdiction,  so  that  all  of  that  bypassed  the  abso 
lutely  insoluble  problem  of  proving  a  transfer  of  title  to  these 
assets  by  any  normal  legal  means.  Otherwise,  I  don't  think  we'd 
ever  have  gotten  them. 


83 
Hicke:    Where  in  the  world  did  you  find  this  Act  of  State  Doctrine? 

McBaine:   Well,  just  beating  the  books  to  find  out  something  that  would  enable 
us  to  win  the  case.   Now,  the  funny  thing  is,  when  the  matter  first 
came  in,  I  got  hold  of  Dean  Roscoe  Pound  of  the  Harvard  Law  School 
and  retained  him  as  an  expert  on  Chinese  law,  thinking  that  we  would 
need  someone  like  that,  because  at  the  end  of  the  war  he  had  gone 
out  to  China  and  revamped  the  entire  law  of  China.   This  was  before 
the  Communists  had  ousted  Chiang  Kai-shek.   So  I  had  a  very  expert 
witness . 

In  fact,  we  got  a  deposition,  a  statement  from  him  --  I  don't 
think  it  was  in  the  form  of  a  deposition  --on  some  questions  we 
asked.   When  we  received  his  statement,  it  was  any  number  of  pages 
thick,  and  when  I  read  the  statement,  it  opened  with  his  qualifica 
tions,  of  course,  and  [laughs]  it  went  on  for  page  after  page  after 
page  about  the  degrees  that  he  had  and  the  books  that  he  had  written 
and  the  honors  that  he  had  received.   It  was  absolutely  incredible. 
About  the  size  of  the  encyclopedia  [both  laugh] .   The  opinion  as  to 
the  law  of  the  matter  occupied  about  half  of  the  final  page.   I've 
never  seen  another  one  like  it  in  practicing  law. 

But  in  any  case,  when  I  discovered  this  seemingly  miraculous 
way  of  solving  the  whole  problem,  I  telephoned  Dean  Pound,  because 
I'd  concluded  we  wouldn't  need  his  services,  and  I  told  him  what  my 
theory  was.   He  immediately  said  over  the  telephone,  "Oh  yes,  you 
mean  the  Act  of  State." 


Hicke:    So  he  was  familiar  with  this? 

McBaine:  Oh,  yes,  he  was  familiar  with  it.  Well,  a  student  of  his  caliber 
would  be.  He  had  an  encyclopedic  mind,  tremendous  mind.  He  knew 
more  law  than  virtually  anybody  in  the  country. 

Hicke:    What  kind  of  a  law  was  it?   I  mean,  who  promulgated  it? 

McBaine:   It  comes  under  the  heading  of  international  law.   I  can  only  assume 
we  never  had  that  taught  in  law  school  or  I  would  have  remembered 
it.   But  once  I  learned  the  doctrine,  I  noticed  that  it's  applied 
regularly.   But  Corcoran's  office  apparently  hadn't  thought  of  this 
approach,  or  otherwise  they  wouldn't  have  had  to  retain  me. 

Hicke:    It  was  probably  applied  more  regularly  after  that. 

McBaine:   Yes.   In  any  case,  the  lawyers  for  Mr.  Field  --  Mr.  Field  retained  a 
San  Francisco  law  firm  here  to  represent  the  Chinese  Communist  gov 
ernment  --  were  no  end  frustrated,  as  you  can  imagine.   But  there 
wasn't  a  thing  they  could  do  about  it.   The  federal  district  judge, 
I  think,  entered  a  judgment  in  our  favor,  and  the  banks  paid  off  and 
the  custodians  of  the  engines  and  spare  parts  turned  over  possession 
of  them  to  Chennault's  airline,  and  everybody  lived  happily  ever 
after.    [both  laugh]   That  was  a  very  interesting  experience  and 
also,  as  I  say,  there  was  the  coincidence  that  a  key  man  in  the 
State  Department  on  this  thing  happened  to  be  a  friend  of  mine. 


84 


Hicke: 

McBaine: 

Hicke: 

McBaine: 


Hicke: 
McBaine: 

Hicke: 
McBaine: 
Hicke: 
McBaine: 


Hicke: 
McBaine: 


Hicke: 


I  think  you  told  me  also  that  you  were  an  associate  at  this  time. 
Yes. 

And  you  said  that  this  was  one  of  the  few  cases  that  the  firm  had 
ever  taken  on  contingency.   Am  I  correct  here? 

Yes.   The  Chennault  airline  was  barely  surviving  with  all  of  the 
upsets  that  had  gone  on,  being  driven  off  the  mainland  where  they 
had  been  operating,  and  they  really  were  strapped  for  money.   I've 
forgotten  exactly  what  our  conversations  were.   My  recollection  is 
that  they  asked  me  if  I'd  take  it  on  a  contingency,  because  they 
were  short  of  funds,  short  of  cash.   If  they  could  get  their  hands 
on  this  $5  million  or  whatever  it  was  in  San  Francisco,  they 
wouldn't  be  short  of  funds,  but  if  they  couldn't  --.   It  was  an 
interesting  case,  and  whatever  senior  partner  I  spoke  to  --  maybe  it 
was  Mr.  Prince;  I  don't  remember  --  approved  the  thing,  and  I  did 
take  it  on  I  think  it  was  a  small  payment  advance,  but  mostly  on  a 
contingent  basis.  The  net  result  was  I  made  a  very,  very  handsome 
fee  because  of  the  contingency.   The  interesting  thing,  in  a  way, 
was  that  as  an  associate,  I  received  none  of  that  fee;  the  fee  went 
to  the  firm  [chuckles]. 

I  think  it  was  one  of  the  largest  single  fees  that  had  ever  come  in 
at  that  point. 

Well,  it  was,  at  that  time,  I  believe.   My  recollection  is  it  was 
something  like  a  quarter  of  a  million  dollars. 

Well,  we're  talking  about  the  late  forties  now? 

Yes. 

And  you  did  become  a  partner  in  1950? 

Yes,  I  believe  that's  right.   It  was  January  1,  1950.   Yes,  I  wasn't 
complaining  about  it.   I  would  say  that  I  expected  that,  that  was 
normal  procedure,  and  I  think  during  the  course  of  the  next  thirty 
years  I  got  my  share  back  again,  and  more. 

Well,  certainly  you  were  a  popular  man  about  town  [both  laugh]. 

Well,  it  was  an  interesting  case;  it  did  interest  a  lot  of  people. 
Of  course,  the  papers  were  interested  in  it  too.   So  it  was  a  very 
interesting  and  satisfactory  episode.   Needless  to  say,  the  Corcoran 
office  was  very  pleased  too. 

I  should  think  so. 


85 


Iranian  Consortium 


McBaine:   Well  now,  perhaps  the-  next  matter  --  in  rough  chronological  order  -- 
was  the  formation  of  the  Iranian  consortium,  which  took  place  in 
1954,  I  believe.   You  may  remember  a  man  named  Mossedeq  led  a  revolt 
in  Iran  against  the  Shah,  eventually  ousted  the  Shah  and  then  seized 
all  of  the  assets  of  the  then-called  Anglo-Iranian  Oil  Company  in 
Iran.   The  Anglo-Iranian  Oil  Company  had  a  concession  for  most  of 
the  southern  part  of  the  country  and  had  discovered  oil  there  and 
then  built  what  was  then,  I  believe,  the  largest  refinery  in  the 
world  at  Abadan. 

Hicke:    This  was  a  British-controlled  firm? 

McBaine:   This  was  a  British  firm.   That  in  itself  has  a  fascinating  histor 
ical  background.   That  came  about  because  of  the  British  conversion 
of  the  British  navy  from  coal  to  oil,  and  that  was  made  possible 
only  by  the  fact  that  the  British  had  this  concession  in  Iran  and 
discovered  enormous  amounts  of  oil.   Incidentally,  the  man  who  made 
that  decision  was  First  Sea  Lord  Winston  Churchill. 

Hicke:    This  was  about  the  time  of  World  War  I? 

McBaine:   Yes.   So  around  1952  Mossedeq  not  only  ousted  the  Shah  but  then 

seized  all  of  the  Anglo-Iranian  Oil  Company  assets  and  drove  all  of 
the  English  out  of  Iran.  The  Iranians  really  weren't  set  up  to 
operate  the  oil  industry  themselves,  so  the  thing  sort  of  went  into 
mothballs  for  the  time  being.  Then  a  period  of  considerable  agita 
tion  followed,  and  Mossedeq  took  to  his  bed  and  wept,  as  opposition 
to  him  arose  and  increased. 


Hicke: 


I  noticed  in  your  speech  -- 


Hicke:     --  you  called  him  the  weeping  Mossedeq,  or  something  to  that  effect. 

McBaine:   Yes,  well,  he  was  famous  for  that  and  undoubtedly  it  was  his  idea  of 
appeal,  because  he  was  a  very  wily  and  intelligent  old  boy;  he 
wasn't  a  fool  and  incompetent.   Some  say  that  the  United  States  had 
the  principal  hand  in  it  through  the  O.S.S.  --  the  C.I.  A.  by  that 
time  --  represented  by  Kermit  Roosevelt.   But  in  any  case,  there  was 
a  counterrevolution,  and  Mossedeq  was  driven  out  of  office,  and  the 
Shah  returned  to  Iran  and  assumed  the  throne  again. 

Well,  then  the  question  was  what  to  do  about  the  Anglo-Iranian 
concession  and  refinery  in  Iran.   Despite  the  fact  that  the  Shah  was 
back  on  the  throne,  the  anti-British  feeling  was  so  high  in  Iran 
that  it  was  deemed  impossible  for  the  British  to  simply  go  back  in 
and  resume  control  of  the  oil  industry  in  Iran.   There  would  be 
public  disorders;  it  simply  wasn't  possible  to  do.   So  under  urging, 
I'm  sure,  by  the  British  government,  who  had  a  controlling 


86 

interest  --  a  majority  interest,  in  fact;  Anglo-Iranian  belonged  to 
the  British  government;  a  minority  interest  in  the  company  was  pub 
licly  held  --  the  chairman  of  the  Anglo-Iranian  Company  at  the  end 
of  1953  wrote  a  letter  to  the  six  major  or  five  major  American  oil 
companies.   [looks  through  papers]  I'll  have  to  correct  that  number; 
I've  forgotten  the  exact  number. 

Hicke:    That's  okay,  I  have  it  here.   I  think  there  were  five.   I  even  have 
a  copy  of  the  letter. 

McBaine:   Five  Americans  and  one  French. 

Hicke:     Is  this  the  letter?  That's  from  Ted  Lenzen's  book,*  and  he  included 
the  letter. 

McBaine:   Yes,  that's  right.   This  is  the  letter.   There  were  five  American 
companies  and  one  French  company  and  one  additional  English-Dutch 
company,  the  Shell  Oil  Company.   Shell  Oil  Company  was  in  an  advan 
tageous  position:  where  politically  it  was  advantageous,  they  were 
Dutch,  and  where  it  wasn't  politically  advantageous  to  be  Dutch, 
then  they  were  English.   [both  chuckle] 

Hicke:    Convenient. 

McBaine:   Sir  William  Fraser  of  Anglo-Iranian  invited  the  heads  of  the 

American  oil  companies  to  come  to  London  for  a  meeting  to  discuss 
what  to  do  about  reactivating  the  oil  industry  in  Iran.   Well,  the 
Americans,  conditioned  by  life  with  our  antitrust  laws,  wouldn't 
even  reply  to  the  invitation  without  first  obtaining  a  clearance 
from  the  Antitrust  Division  of  the  United  States  Justice  Department. 
But  having  obtained  that  clearance,  they  did  go  to  London. 

Now,  here  again  is  a  case  where  even  though  Mr.  Madison  was  the 
general  counsel  to  Standard  of  California,  he  couldn't  possibly 
devote  himself  to  this  matter  single-handedly  and  continue  to  dis 
charge  his  duties  as  general  counsel.   So  I  was  assigned  to  go  to 
London  with  the  Standard  representative.   First  Mr.  [Gwin]  Follis 
went  for  the  meeting  of  the  heads  of  the  companies;  Mr.  Follis  was 
then  the  chairman  and  the  chief  executive  officer  of  Standard.   And 
then,  once  they  decided  they  would  meet  with  the  English  and  the 
other  invitees,  I  was  assigned  to  this  job,  and  I  accompanied  a  vice 
president  of  Standard,  a  long-time  officer  in  their  international 
and  foreign  relations  and  foreign  enterprises,  T.  L.  Lenzen.   We 
were  sent  over  along  with  some  other  staff  members  as  permanent  rep 
resentatives  of  Standard  Oil.  Well,  just  to  give  you  an  idea  why  I 
say  that  this  simply  couldn't  be  for  Mr.  Madison,  I  spent  nine 
months  of  1954  abroad,  either  in  London  or  in  Iran  --in  Teheran. 


*     Theodore  L.  Lenzen,  Inside  International  Oil,  1972.  The  five 
American  companies  were  Socal,  Texaco,  Standard  Oil  of  New  Jersey, 
Gulf,  and  Socony  Mobil.   See  following  page  for  Fraser 's  letter. 


A.  E.G.  DRAKE 

NEW  YORK  «O.N   Y. 

'' 


|WANIAN     014.    CO..LYO. 

... •>-:'" 

Urgent  and  Confide ntiaJ.  3rd  December,  1953 


Kr.  R.  0.  Follis 

Standard  Oil  Company  of  California 

225  Bush  Street 

San  Francisco  20,  Cal. 

• 

Dear  Mr.  Follis: 

Since  Mr.  Hoover  returned  from  his  visit  to  Tehran,  I  have  had 
the  benefit  of  exchanging  views  vith  hin  on  the  general  lines  along  vhich 
a  solution  of  the  Persian  oil  situation  mif.ht  be  sought. 

Mr.   Hoovor  has  informed  me  that  the  ideal  solution,   in  his 
opinion,  would  be  for  the  Anelo-Iranian  Oil  Company  to  return  to  Persia 
alone,  a  viev  which  is,  of  ccurse,  held  by  me  and  is,  I  think,  shared  by 
you.     He  has,  hovever,    said  that  he  doubts  whether  it  is  possible  to 
achieve  this,  and  his  conversations  in  Tehran  l«d  M-  to  *hr  view  Vast 
a  solution  wij-ht  £•  found  thrcu^li  the  ifiediur  of  a  group  of  companies 
rather  than  through  a  single  comoany. 

As  you  vill  have  seen  from  the  press,  efforts 'are  now  being 
cade  to  restore  diplomatic  relations  between  the  British  and  Persian 
Governments,  which,   if  successful,  would  lead  to  the  resu.rption  of  direct 
talks  on  the  oil  problem  between  the  British  and  the  Persians. 

Whilot  I  should  have  preferred  to  have  seen  these  measures 
brought  to  conclusion  first,  Mr.  Hoover  has   rtressed  the  urgency  in 
the  situation  as  he  feels  very  strongly  ther-j  are  inherent  risks  in  it 
vhich  rdght  bee  one  dangerous  if  the  situation  drifts.     He  has  suggested 
tc  me  that  valuable   tir*  could  vsll  be  saved  if  discussions  could  be 
opened  vith  representatives  of  companies  abl«  to  make  some  contribution 
to  a  solution  of  the  problem  who  mir.htj  in  the  interests  of  progress 
snd  stability  in  the  countries  of  the  Middle  East,  be  ready  to  partl- 
cipste  in  such  a  group.     He  has  also  suggested  that  these  talks  might 
take  place  on  the  foe ting  that  the  subject  to  be  discussed  vas  ct  this 
stage  entirely  hypothetical  and  without  commitment  of  any  sort  to  any 
of  the  companies  taking  part  in  them. 

On  this  understanding,  and  recognising  as  Mr.  Hoovor  and  I  do, 
and  I  am  sure  you  vill  too,  the  vital  necessity  of  avoiding  unwarranted 
speculation  lest  the  novos  nov  in  traJ  n  at  official  levels  should  bo 
prejudiced  by  riir-ours  loading  to  preconceived  notions  of  a  specific  form 
of  rettlervent,    I  would  be  very  nleated  to  krcw  if  you  would  be  rc.icy  to 
rtir.cvrs  with  r.f.  and  my  collcn.rues  the  possibility  of  yur  co^r-aiiy 
ii  a  CTOU:-.     The  discussion  wovld  ranrc  over  the  vide 


-  2  • 


area  not  only  of  the  conditions  under  which  such  a  group  night  be  formed, 
but  also  of  the  terns  and  conditions  under  which  the  members  of  the  group 
vould  be  prepared  to  enter  into  comitments  to  dispose  of  Persian  oil, 
These  terms  might  later  become  the  subject  of  negotiationa  with  the  Persian 
Government, 

In  conclusion,  I  should  mention  that  I  an  addressing  similar 
invitations  to  take  part  in  these  talks  to  Kr.  E.  Holraan,  Sir  Frederick 
Godber,  Mr.  B.B.  Jennings,  Kr.  J.S.  Leach  and  Mr.  S.A.  Swensrud,"  as  I 
hare  felt  that  the  ccroanies  which  could  make  a  constructive  contribution 
to  a  solution  are  those  who  are  now  engaged  in  the  production  of  oil  in 
th«  Middle  East  and  in  the  marketing  of  it  on  a  largo  scale  internationally. 
So  long  as  the  discussions  are  uurely  hypothetical,  it  seems  desirable  to 
confine  them  to  the  smallest  possible  circle  of  representatives  drawn  from 
the  above  groups. 

If  it  would  suit  you,  I  would  sugrest  that  the  discussions 
f*      should  teke  place  in  London  at  your  earliest  convenience  and  in  the 
—t      neantime,  night  I  again  ask  you  to  do  all  you  can  to  avoid  unwarranted 
H       speculation  as  to  future  developments. 

*0 


m 


Ti 


-ri 

» 


With  kindest  regards, 


Tours  sincerely, 

WILLIAM  FRASER,   CItf.lRMAH 
ANGLO-IRANIAN   OIL  CO.,   LTD. 


A.i.C.   Drake 


87 

The  first  question  was  what  were  the  consortium  members  going 
to  get,  or  going  to  take  over,  of  the  Anglo-Iranian  concession  and 
refinery,  and  what  were  they  going  to  pay,  if  anything,  for  what 
they  took  over.   Consortium  was  an  English  word  that  is  now  used  in 
American  English  as  well  as  English  English,  but  then  it  commonly 
was  not.   But  it's  obviously  derived  from  the  Latin  and  simply  means 
a  group  of  companies. 

Just  as  a  starter,  it  was  agreed  by  all  hands  --  and  the 
British  themselves  agreed  to  this,  which  really  means  the  British 
government  agreed,  because  as  I  say,  the  British  government  held,  I 
believe,  a  51-percent  interest  in  Anglo-Iranian,  and  whatever  Anglo- 
Iranian  did  of  this  kind  of  magnitude  was  done  only  after  approval 
by  the  British  government.   So  it  was  agreed  that  the  British  could 
not  remain  in  control  of  it;  they  could  not  have  a  majority 
interest.   Politically  speaking  that  was  impossible;  it  wouldn't  go 
down . 

Hicke:    Wouldn't  go  down  with  the  Iranians? 

McBaine:   That's  right.   It  wouldn't  be  possible.   As  I  say,  there'd  be  public 
disorders  and  they  simply  wouldn't  be  able  to  operate.   The  Ameri 
cans  took  the  position  that  they  would  pay  Anglo-Iranian  the  market 
value,  or  rather  the  fair  value,  I  guess  --  perhaps  there  wasn't  a 
market  --  of  the  interest  they  took,  really  without  taking  into 
account  the  impossible  political  position  that  the  English  were  in. 
So  the  first  job  was  to  negotiate  what  that  [fair  value]  was. 

Sir  William  Fraser  was  a  Scotsman  who  still  wore  high-button 
shoes  in  1953,  so  he  was  a  bit  on  the  conservative  side  [both 
chuckle],  and  actually  so  much  so  that  this  was  probably  what  cost 
them  the  concession.   He  was  not  very  flexible  and  not  very  modern. 
He  didn't  recognize  the  changing  world.   In  any  case,  that  was  a 
long  and  hard-nosed  negotiation,  I  can  assure  you. 

Hicke:    Before  you  go  on,  tell  me  a  little  bit  about  the  day-to-day  routine. 

McBaine:   Well,  for  the  important  matters,  for  instance,  when  they  had  key 
sessions  of  this  thing,  the  chief  executive  officers  of  the  com 
panies  would  all  come.   Mr.  Follis  would  come  from  San  Francisco, 
and  the  chief  executive  officers  of  the  other  companies  came.   They 
would  bring  their  staffs.   Mr.  Lenzen  was  Mr.  Follis's  number  one 
assistant  on  this  thing,  but  he  might  bring  with  him  a  financial  man 
or  a  marketing  man  or  other  adviser  of  this  kind,  according  to  what 
ever  kind  of  advice  he  felt  he  needed  at  the  moment.   They  had  these 
periodic  meetings  of  the  principals,  and  then  when  those  meetings 
were  over,  it  was  up  to  the  lawyers  and  whatever  other  staff  people 
there  were  to  put  the  decisions  into  whatever  form  was  required.  We 
had  to  work  out  an  agreement.   We  had  a  written  agreement  [among  the 
oil  companies],  of  course,  on  this  thing,  before  we  ever  went  to 
Iran. 


Hicke: 


McBaine: 


Hicke: 


88 

So  we  had  to  arrive  at  this  settlement,  and  the  settlement  was 
in  the  billions,  even  in  1953.  The  settlement  wasn't  cash  out  of 
the  pockets  of  the  consortium  companies;  most  of  the  settlement  came 
from  the  oil  that  was  to  be  produced  when  the  consortium  put  the 
Iranian  properties  back  into  production.   But  it  did  amount  to  bil 
lions  of  dollars. 

After  reaching  that  agreement,  then  the  next  thing  we  had  to  do 
was  to  go  to  Iran  and  negotiate  a  settlement  with  the  Iranian  gov 
ernment,  and  that  was  a  long  and  tedious  affair,  and  an  extremely 
ticklish  affair. 

There  were  three  Iranian  negotiators.  The  principal  one  was  a 
member  of  a  former  royal  family  there,  and  then  the  finance  minister 
was  one  of  them,  and  then  a  so-called  elder  statesman  was  one  of  the 
three.   Now  their  job  was  not  all  that  easy,  because  while  the  Shah 
was  then  back  firmly  on  the  throne  and  the  Mossedeq  supporters 
really  had  lost  complete  political  power,  nevertheless,  there  was 
this  enormous  anti-English  feeling  still  in  Iran.  The  Iranians,  by 
and  large,  have  a  great  deal  of  anti-foreign  sentiment  anyway,  not 
in  the  way  they  do  now  --  that  is,  this  fundamental  Islamic  point  of 
view  had  not  arisen  at  that  time  --  but  they  just  basically  are  a 
very  old  civilization,  as  you  know,  a  very  great  civilization  in 
ages  past,  and  many  people  like  that  really  resent  these  brash  new 
comers  who  are  only  100-200  years  old  and  according  to  them  have 
little  culture.   So  these  negotiators  had  to  be  willing  to  make  a 
deal,  but  they  could  not  make  a  deal  so  good  for  us  that  the  Iranian 
public  would  be  stirred  up,  or  the  whole  thing  would  blow  up  and 
they  wouldn't  accomplish  anything. 

They  didn't  want  to  lose  face. 

Well,  yes,  they  couldn't.   At  the  same  time,  Western  tradition  is 
that  a  good  contract  is  a  contract  in  which  both  parties  get  what 
they  want.   This  may  sound  odd  to  talk  about,  but  it  does  make  a 
difference.   Most  Westerners  will  not  negotiate  a  contract,  a  long- 
term  contract  anyway,  which  simply  skins  the  other  party  alive,  even 
if  they  can  outwit  him  and  overcome  him,  because  all  that  means  is 
they've  got  trouble  on  their  hands  at  some  point.   Nobody  is  going 
to  stand  still  for  that.   It's  like  the  Treaty  of  Versailles  at  the 
end  of  World  War  I.   You  clobber  Germany  and  impose  sanctions  on 
them  and  impose  reparations  on  them,  you  really  grind  them  into  the 
dust,  and  what  you  do  is  produce  a  Hitler.   So  this  was  the  general 
approach  that  the  consortium  companies  took  to  this.   We  had  to  have 
an  agreement  which  would  meet  their  requirements  and  an  agreement 
which  would  meet  our  requirements. 

Ted  Lenzen  says  that  Mr.  Herbert  Hoover,  Jr.,  who  was  assisting  and 
consulting,  kept  saying  something  "about  the  contract  has  to  be  done 
with  mirrors."*   [McBaine  chuckles]  I  can  get  the  quote  out  of  here, 


'He  repeatedly  referred  to  the  necessity  of  working  out  an 


McBaine; 
Hicke: 


McBaine: 


Hicke: 

McBaine: 

Hicke: 

McBaine: 


89 

but  anyway,  it  has  to  appear  one  way  to  one  side  and  the  same  con 
tract  has  to  work  the  other  way  for  the  other  side. 


Yes. 


And,  I  might  just  add  here  something  else  that  Mr.  Lenzen  says, 
[looks  through  book]  To  quote  from  him,  he  says:   "The  days  became 
weeks  of  meetings,  with  the  most  difficult  matter  the  drafting  of  a 
management  agreement  that  by  a  choice  of  words  would  give  the  con 
sortium  effective  control  but  would  appear  to  the  Iranians  that  this 
was  not  the  case.   The  legal  groups,  with  McBaine  taking  the  leading 
role,  finally  came  up  with  a  draft  that  satisfied  all  the  partici 
pants  and  hopefully  could  be  sold  to  the  Iranians." 

Well,  that's  right.   When  we  went  out  to  Iran,  of  course,  Anglo- 
Iranian  had  their  lawyers  there;  they  were  British  lawyers,  and  they 
had  a  prominent  barrister,  a  Q.C.,  as  their  lead  counsel.   The  Shell 
Oil  Company  also  had  English  counsel  there.   The  Americans,  of 
course,  had  American  lawyers.   The  French  had  a  distinguished  French 
counselor  there. 

The  consortium  group  took  over  a  villa  in  Teheran  which  had  a 
big  garden  surrounding  it.   It  was  warm;  these  meetings  were  mostly 
during  spring  and  summer  months,  and  we'd  meet  in  these  beautiful 
surroundings.   [looks  at  pictures  on  wall]. 

There's  a  picture  on  your  wall  indicating,  I  don't  know  how  many  -- 
eight  or  ten,  maybe  more  than  that  -- 

[Counting]  I  think  eleven. 

--  men  sitting  there  with  lots  of  papers. 

That's  right.   We  were  drafting  the  agreement  and  proposals  for  the 
consortium  negotiating  team,  which  consisted  of  a  couple  of  the 
chief  executive  officers  with  one  chief  negotiator,  selected  by  the 
chief  executive  of  Exxon,  which  was  the  largest  company. 

I  believe  that  I  was  fortunate  or  unfortunate  enough  to  have  to 
[chuckles]  raise  this  point  at  the  very  first  meeting:   I  said, 
"This  agreement  is  going  to  be  in  American  and  not  in  English."  Now 
there  was  a  very  serious  reason  for  that;  this  wasn't  simply  nation 
alistic  pride.   Again,  the  feeling  against  anything  English  was  so 
strong  in  Iran.   A  lot  of  the  Iranians,  such  as  the  chief  lawyer  for 
the  Iranian  negotiators,  were  educated  in  England,  spoke  perfect 
English.   Not  American,  but  English  English.   But  the  English  Eng 
lish,  as  a  matter  of  form  in  a  contract,  is  quite  different  from  the 
form  that  the  Americans  use.   The  language  is  quite  different,  and 


agreement  'by  using  mirrors'  --  things  must  appear  one  way  to  cer 
tain  parties  and  another  way  to  others."  Ibid,  p.  86. 


90 

also  the  English  language,  as  used  by  the  English  barristers  who 
write  up  these  agreements,  is  much  more  difficult  for  a  non-English 
speaking  person  to  master  than  American  English  is.   American  Eng 
lish  is  more  straightforward. 

I  don't  want  to  take  time  to  go  into  the  details,  but  there  is 
a  basic  difference,  and  we  were  doing  everything  we  could  --  with 
the  agreement  and  wholehearted  cooperation  of  the  British  --  to 
downplay  their  preemiment  part,  because  they  still  had  the  largest 
single  interest  in  the  Iranian  oil  industry.   Even  though  they  had 
given  up  a  controlling  interest,  they  still  had  a  larger  interest 
than  any  one  of  the  American  companies  did. 

Hicke:    Forty  percent,  I  think. 

McBaine:   Yes.   So  part  of  that,  as  I  say,  was  not  to  stir  up  the  Iranians  and 
get  them  emotional  and  heated  up.   So  we  drafted  the  agreements  in 
American  English.   [chuckles]  We,  the  negotiators,  also  met  daily 
in  another  villa  in  Teheran,  and  oftentimes  one  or  more  of  the  law 
yers  would  attend  there  --  I  think  there  was  always  at  least  one  -- 
and  the  Iranian  team  of  negotiators  --  the  three  --  also  had  lawyers 
there.   I  think  all  three  of  them  spoke  English,  and  the  Iranian 
lawyer  spoke  perfect  English,  but  all  of  the  negotiations  were  in 
Pharsee  on  their  side  and  translated  and  in  English  on  our  side,  of 
course . 

Hicke:    I  suppose  that  gives  everybody  time  to  think. 

McBaine:   Well,  it  gave  them  time  to  think.   You  see,  if  the  American  negotia 
tors  could  understand  Pharsee,  they  would  understand  the  original 
answer,  and  then  by  the  time  the  translator  finished  giving  the  Eng 
lish  version  you'd  have  had  all  that  time  to  think  about  it,  which 
is  probably  one  reason  why  they  proceeded  as  they  did.   They  really 
understood  what  our  negotiators  said  in  English,  but  they  had  the 
opportunity  then  to  wait  for  the  Pharsee  translation.   They  stuck  to 
that  all  the  way  through. 

Hicke:    That's  right,  but  it  wouldn't  have  worked  in  reverse. 

McBaine:   No,  it  wouldn't  work  in  reverse.   I  think  we  had  one  person  there 
who  spoke  Pharsee,  a  former  Anglo-Iranian  employee,  but  that's  all. 

Well,  in  any  case,  that  went  on  for  quite  a  long  time  and  then 
we  reached  an  impasse  and  broke  off  negotiations.  We  all  went  back 
to  London,  because  the  consortium  negotiators  had  reached  a  point 
where  they  couldn't  go  any  further  without  exceeding  their  instruc 
tions,  and  the  Iranians  had  come  to  a  dead  end;  they  said  they 
simply  wouldn't  accept  what  was  being  proposed.   So  we  had  a  break 
and  had  to  go  back  to  London  and  again  summon  the  chief  executive 
officers  of  the  member  companies  in  the  consortium.  We  made  some 
adjustments  --  I've  forgotten  now  what  they  were  --  and  then  went 
back  to  Teheran  again. 


91 


After  another  couple  of  months,  we  finally  reached  an 
agreement.   In  general,  it  was  agreed  that  Anglo-Iranian  would 
retain  a  40  percent  interest  in  whatever  could  be  worked  out  with 
Iran,  and  the  seven  other  members  of  the  consortium  would  have  60 
percent,  divided  between  them.   So  we  had  an  agreement  as  to  how 
Anglo-Iranian  should  be  compensated  for  giving  up  60  percent  of 
their  erstwhile  concession.   It  was  nine  months  later,  as  I  say, 
when  we  finally  concluded  this  thing.   It  really  was  an  extraordi 
nary  achievement,  and  the  negotiators  for  both  sides  did  a  marvelous 
job.   There  was  the  best  of  feelings  on  both  sides  when  the  thing 
was  concluded.   Nobody  was  upset  or  angry  when  the  agreement  was 
concluded.   The  ageement  had  to  be  ratified  by  the  Iranian 
Parliament  or  Majlis,  which  it  was,  and  the  agreement  then  lasted 
for  twenty-five  years. 

Hicke:    That  is  truly  an  amazing  conclusion. 

McBaine:   In  the  international  oil  business,  that  is  a  long  time.   So  it  was  a 
fascinating  experience.   It  was  somewhat  limited,  because  the  Ira 
nian  public  were  not  informed.   I  don't  know  what  the  Iranian  papers 
said,  but  I  know  all  of  the  details  of  this  thing  were  not  carried 
in  the  papers,  like  we  carry  it  here. 

There  had  been  so  much  anti-English  feeling  that  each  of  us  was 
assigned  a  car  and  a  driver  in  Teheran.   We  were  not  really  per 
mitted  to  go  around  on  our  own,  and  we  were  not  permitted  to  travel 
anyplace.   We  were  not  permitted  to  go  to  Isfahan  or  to  any  of  the 
ruins.   We  had  one  excursion  planned  to  go  up  to  the  Caspian  Sea, 
where  they  have  some  resorts  and  also  where  they  process  sturgeon 
and  caviar.   At  the  last  moment,  that  was  cancelled.   So  the  net 
result  was  we  spent  the  entire  time  in  Teheran. 

Hicke:    Oh,  what  a  shame. 
McBaine:   Yes,  it  was  too  bad. 

Hicke:     [chuckling]  You  certainly  jumped  from  dealing  with  one  old  culture, 
that  of  China,  to  another  old  culture. 

McBaine:   [chuckling]  That's  right.   Well,  I'd  been  in  the  Middle  East  for  two 

years  during  World  War  II,  and  actually  I  was  in  Teheran  during 

World  War  II  for  a  brief  period,  just  before  the  Teheran  Conference. 

So  I  did  have  some  familiarity  with  them  and  their  sense  of  culture. 

It  was  a  fascinating  experience  for  me.   I  made  some  very  good 
friends.   We  had  an  interesting  conclusion  when  the  agreements  had 
been  signed.   They  had  to  be  then  taken  around  and  signed  by  the 
chief  executive  officers  of  the  various  consortium  companies,  and 
that  meant  all  around  to  France,  London,  New  York,  San  Francisco. 

The  consortium  companies  chartered  a  plane  to  fly  us  back  to 
London  from  Teheran  when  work  on  the  agreement  was  finished  and  all 
that  remained  was  the  signing,  the  execution.   We  decided  that  obvi- 


Hicke: 
McBaine: 

Hicke: 
McBaine: 


McBaine: 


92 

ously  the  thing  to  do  was  to  load  up  on  caviar;  so  we  got  a  chest  -- 
a  big  chest  --  filled  it  with  dry  ice  and  put  it  aboard  the  plane. 
Everybody  went  out  and  bought  caviar.   I  went  out  and  bought  as  much 
as  I  could  hold  under  one  arm.   Caviar  is  treated  with  salt  --  salt 
is  a  preservative  --  and  the  farther  it's  going  to  travel  and  the 
longer  it's  going  to  be  on  shelf  in  a  store  someplace  or  another, 
the  more  salt  you  have  to  put  in  it.  The  really  superb  caviar  you 
buy  locally  and  eat  locally  has  very  little  salt  in  it:   just  enough 
to  taste,  but  not  enough  to  act  as  a  preservative.   So  it  sort  of 
limited  the  amount  you  could  buy,  to  be  sure  none  of  it  would  spoil. 
I  had  a  great  big  package  like  this  [gestures]  that  would  just  fit 
under  one  arm. 

We  got  out  to  the  airport,  and  the  Iranian  negotiators  were  all 
at  the  airport  --  the  prime  minister  from  the  ex-Royal  family,  and 
the  finance  minister,  and  the  senior  citizen.*  They  were  all  out 
there,  and  the  goodbye  gifts  to  the  members  of  the  consortium  party 
were  caviar  [hearty  laughter  by  both] .   So  I  got  aboard  the  plane 
with  two  packages  as  big  as  I  could  carry,  one  under  either  arm. 
When  I  got  back  to  London,  I  couldn't  possibly  eat  all  that  caviar 
before  it  would  spoil  [more  laughter  by  both] .   So  I  was  giving 
caviar  away  for  several  weeks. 

Oh  dear.  Well,  I'd  say  you  deserved  it,  at  least. 

Well,  it  was  a  fascinating  experience  and  turned  out  very  well. 
You've  read  Mr.  Lenzen's  book.   He  gives  you  a  full  account  of  it. 

There's  a  picture  that's  also  in  his  book  of  the  signing  of  the 
agreements.   I  don't  know  if  seeing  their  faces  would  call  to  mind 
any  more  stories  [shows  picture]. 

Well,  for  one  thing,  the  situation  was  so  delicate  that  after  the 
negotiators  reached  agreement  and  the  final  texts  of  the  agreements 
were  approved,  it  was  felt  that  it  was  essential  not  to  let  this 
thing  get  out.   Of  course,  there  was  great  interest  in  the  world  as 
to  what  was  going  on,  especially  in  the  oil  industry,  but  interest 
in  the  governments  too,  because,  for  one  thing,  where  was  the 
British  Navy  going  to  get  its  fuel  oil?   The  companies  thought  it 
was  absolutely  essential  to  maintain  complete  secrecy,  and  I  suppose 
they  were  thinking  about  speculators  in  stocks  and  so  on. 

** 

In  London  the  Anglo-Iranian,  now  called  British  Petroleum  --  they 
changed  their  name  from  Anglo-Iranian  as  a  result  of  the  formation 
of  the  consortium  --  hired  an  inn  on  the  outskirts  of  London,  I've 
forgotten  the  name  of  it,  a  very  attractive  place,  and  everybody 
congregated  there.   It  looked  like  a  meeting  of  the  Mafia  chieftains 


See  following  page. 


Turner  McBaine  and  Samuel  L.  Wright. 
1955 


Turner  McBaine  being  interviewed  in  his  office. 

Photograph  by  Carole  Hioke 


93 


Hicke: 

McBaine 
Hicke: 


all  arriving  [both  chuckle].  We  also  held  the  signing  of  the  Dutch 
and  the  English  companies  there.   You  see,  if  it  had  taken  place  at 
Anglo-Iranian  headquarters,  undoubtedly  there  would  have  been  news 
people  snooping  around.   The  same  thing  was  true  in  New  York;  it  had 
to  be  carried  out  with  secrecy.   There  was  no  release  on  it  until 
everybody's  name  was  on  it  and  nothing  could  go  wrong. 

[laughing]  You  recognized  participants  by  the  amount  of  caviar  they 
were  carrying? 

[chuckling]  Well,  everybody  was  loaded  up,  I'll  tell  you. 

So  then  was  there  a  general,  simultaneous,  worldwide  press  announce 
ment,  or  how  was  that  handled? 


McBaine:  Oh  yes.  I  don't  remember  the  details  of  that,  but  sure,  there  were 
announcements  made,  probably  in  New  York  and  London  simultaneously, 
I  would  guess.  I  didn't  participate  in  that.  But  I  made  some  very 
good  friends  there. 

Hicke:    Do  any  particular  names  stand  out  other  than  the  ones  you've  men 
tioned? 

McBaine:   Well,  no,  I  don't  think  so.   The  principal  English  barrister  became 
a  very  good  friend  of  mine  there.   He's  deceased  now,  but  he 
remained  a  friend  of  mine  for  the  rest  of  his  life. 

Hicke:    What  was  his  name? 

McBaine:   Milner  Holland.   Also  John  Loudon,  the  principal  representative  of 
the  Shell  companies,  remained  a  friend  of  mine,  and  I  see  him  occa 
sionally  here  in  San  Francisco  when  he  comes  here.   I  saw  him  maybe 
six  months  ago.   He  is  a  Dutchman  but  you'd  never  know  it;  you'd 
think  he's  an  Englishman.   He's  one  of  the  international  Dutch. 

Hicke:    There  was  somebody  named  Snow? 

McBaine:   Yes,  Bill  Snow  was  the  senior  representative  of  Anglo-Iranian  out 
there.   I  think  he  was  the  oldest  man  there.   But  the  head  Anglo- 
Iranian  representative  who  was  there,  in  and  out,  and  certainly  in 
London,  was  Billy  Fraser,  as  he  was  called,  who  was  the  son  of  Sir 
William  Fraser  and  later  became  the  head  of  the  company. 

Hicke:    Of  British  Petroleum? 

McBaine:   Of  British  Petroleum,  yes.   I've  forgotten  his  peerage  name,  but  I 
think  the  custom  in  England  was  to  award  a  knighthood  to  whoever 
became  the  chief  executive  officer  of  what  is  now  British  Petroleum, 
Then  when  he  retired  he  was  granted  a  peerage.   Billy  Frazer's 
father,  who  sent  out  that  letter  to  the  companies  that  you  referred 
to,  was  known  as  Willy  Fraser.   After  he  was  knighted  he  was  called 
Sir  Willy  [chuckling];  his  son  was  Billy.   His  son  was  much  more 
Americanized  and  much  more  flexible  than  Sir  Willy  was.   Sir  Willy 
was  a  gentleman  of  the  old  school. 


94 


Hicke: 
McBaine: 

Hicke: 

McBaine: 

Hicke: 

McBaine: 

Hicke: 

McBaine: 


Hicke: 
McBaine: 


Hicke: 


Then  there  was  Mr.  Orville  Hardin  from  Jersey. 

Yes.   He  was  the  original  chief  negotiator  for  the  consortium  and  he 
became  ill  in  Iran  and  had  to  retire,  resign  the  post.   He  was  suc 
ceeded  by  Howard  Page  of  Jersey. 

And  then  there  are  some  others  [looks  through  papers]. 
Have  you  got  some  other  names  in  there? 

Let  me  see  who  else  I  have  here.   Li  1 ley  from  Texaco,  Salzar  from 
Gulf,  Grove  from  Socony  Mobil. 

Yes.   Neil  Lilley  I  knew;  he  was  from  San  Francisco  originally.   The 
best  friend  that  I  had  out  of  that  was  Epley  of  Texaco. 

Marion? 

That's  right,  Marion  Epley.   Marion  Epley  was  at  that  time  a  rela 
tively  young  lawyer  from  Louisiana,  where  he'd  been  a  Texaco  lawyer. 
Then  he  was  brought  to  New  York  and  sent  out  to  Iran  on  this  mission 
as  a  lawyer  advising  Lilley,  who  was  the  Texaco  representative  there 
at  the  time.   Epley  and  I  roomed  together  for  several  months  and 
became  very  good  friends  --  a  delightful  fellow.   Subsequently,  when 
this  was  all  over  and  he  went  back  to  Texaco,  he  ultimately  became 
the  president  of  Texaco.   He  left  the  legal  side  and  went  to  the 
business  side  and  became  the  president  of  Texaco.   He's  retired  now 
and  living  in  Florida. 

James  O'Brien  was  then  the  legal  affairs  vice  president  for  Socal? 

No,  not  at  that  time.   He  was  a  PM&S  lawyer.  We  also  had  a  London 
group.   I  should  have  mentioned  this,  but  I  really  didn't  partici 
pate  in  it.   After  the  original  settlement  as  to  how  much  Anglo- 
Iranian  was  going  to  give  up  and  how  much  the  consortium  members 
were  going  to  pay  them  for  it,  our  group  went  out  to  Teheran  to 
negotiate  the  government  agreement.   Meantime,  at  that  time  a  second 
group  was  established,  again  in  London,  and  it  was  their  job  to 
draft  what  was  called  a  participants'  agreement.   That  is,  assuming 
that  the  government  agreement  was  reached  and  that  the  Iranians 
agreed  that  the  consortium  should  take  over  the  oil  industry,  how 
was  it  going  to  be  operated  --  inter  se,  i.e.,  among  the  consortium 
members.   James  O'Brien  was  the  PM&S  lawyer  in  that  group. 

Of  course,  when  we  came  back  from  having  signed  up  the  govern 
ment  agreement,  that  work  was  still  going  on,  and  I  joined  that 
group  at  that  time,  but  basically  they  had  done  most  of  the  work  by 
the  time  the  Teheran  group  finished  the  government  agreement.   So 
that  s  where  he  fitted  in.   He  went  to  Standard  some  years  after 
that. 

Oh,  I  see.   Then  at  the  end,  after  all  that  was  done,  five  percent 
of  the  American  share  was  given  to  the  independent  companies. 


95 

McBaine:   Yes,  as  a  sop,  if  you  will,  to  the  antitrust  division  of  the  U.S. 
Justice  Department,  because  they  really  had  to  approve  all  these 
things.   I  don't  know  whether  this  was  necessary  to  get  their 
approval  --  I  don't  remember  the  details  --  but  I  think  it  was 
voluntarily  put  in  so  that  the  major  international  oil  companies, 
who  were  often  targets  for  attack  in  the  media,  could  try  to  con 
vince  people  they  weren't  trying  to  hog  this  whole  show.   As  a 
matter  of  fact,  several  of  the  consortium  members  were  very  leery  of 
this  thing.   They  thought  they  were  taking  an  enormous  responsi 
bility  in  an  enormously  unstable  situation  and  they  were  probably 
throwing  away  millions  and  millions  of  dollars.   They  were  not  all 
that  keen  about  this.  This  wasn't  a  great  windfall  in  the  eyes  of 
everybody,  by  any  means. 

Hicke:    It  was  actually  done  at  the  request  of  the  government? 

McBaine:   That's  right.   It  was  done  because  the  United  States  government 

wanted  it  done.   In  any  case,  five  percent  of  the  interest  in  the 
consortium  was  set  aside  for  other,  smaller  and  independent  oil  com 
panies.   They  had  a  number  of  people  that  bid  for  that,  and  it  was 
decided  by  the  government  of  the  United  States  who  was  an  eligible 
bidder  and  who  wasn't. 

Hicke:    Were  you  involved  in  any  of  those  agreements? 

McBaine:   No,  just  the  language  as  to  whether  this  would  go  to  them.   But  if 
they  have  their  own  agreement  among  themselves,  which  I  doubt  --  I 
don't  know  --  they  had  to  take  the  other  agreements  as  they  were. 
We  had  enough  people  in  the  act  [chuckling]  to  try  to  negotiate 
agreed-upon  text  without  including  them.   So  they  were  simply  told, 
"Here's  an  interest  if  you  want  to  buy  it,"  and  they  all  did.   As 
far  as  I  know,  there's  never  been  any  complaint  on  the  part  of  any 
one  of  those  companies.   It  turned  out,  as  I  say,  beautifully.   They 
had  twenty-five  years  of  uninterrupted  production. 

Hicke:    Were  there  consultations  with  the  antitrust  division  during  the 
negotiations? 

McBaine:   Oh,  yes,  yes.   The  agreements  were  submitted  to  the  antitrust  divi 
sion  and  approved  by  them.   Not  only  was  the  original  meeting  with 
Sir  William  Fraser  approved,  but  the  texts  of  the  agreements  were 
approved,  particularly  the  participants'  agreement.   Because,  you 
see,  just  take  one  major  question:   you've  got  all  these  parties  who 
together  own  100  percent  interest  in  the  oil  industry  in  Iran. 
Well,  the  question  is,  who  decides  on  how  much  oil  is  going  to  be 
produced  next  month  or  next  year? 

Hicke:    That's  a  good  question. 

McBaine:   Yes,  and  how  do  you  decide  that?  Well,  that  presents  not  only  a 

very  difficult  legal  and  economic  question,  but  it  presents  a  ques 
tion  of  great  interest  to  the  antitrust  division. 

Hicke:    And  all  of  that  then  was  made  part  of  this? 


96 


McBaine: 
Hicke: 

McBaine: 

Hicke: 

McBaine: 


Hicke: 

McBaine: 
Hicke: 


McBaine: 


Made  part  of  the  agreement  and  approved  by  the  antitrust  division 
before  we  signed  it. 

Do  you  happen  to  recall  who  in  the  antitrust  division  you  were 
dealing  with? 


No, 


I  don't,  now. 


Does  it  actually  conform  pretty  much  to  American  antitrust  law? 

Oh,  yes,  sure.   As  far  as  the  American  companies  were  concerned, 
that's  all  they  were  interested  in.   The  British  have  a  very  rudi 
mentary  antitrust  law  compared  to  ours,  and  the  Iranians  had  none  at 
all,  of  course.   Oh,  yes,  each  company  had  to  make  sure.   The 
French,  I'm  sure,  had  to  make  sure  that  the  French  government  was 
agreeable,  and  the  Dutch  that  the  Dutch  government  was. 

Another  thing  that  Lenzen  says  is  that  a  number  of  independent  and 
government-affiliated  companies  have  developed  oil  since  then,  other 
than,  I  guess,  the  British  Petroleum,  in  Iran. 

How  do  you  mean,  developed? 

He  says,  talking  about  the  consortium,  "This  is  still  by  far  the 
most  important  entity  in  the  country,  but  the  government's  own 
national  Iranian  Oil  Company  is  increasingly  important,  and  there 
are  now  a  number  of  independent  and  government-affiliated  companies 
that  have  developed  appreciable  oil."   I  guess  in  Iran.   Does  that 
mean  that  there  are  other  oil  companies  now  in  Iran?   [leafing 
through  book]   Here's  the  page  before,  if  you  need  that. 

I  don't  know  what  he's  referring  to  there.   You  see,  this  is  the 
whole  history  of  these  concessions  in  the  Middle  East.   When  they 
start  out,  they  don't  even  know  they  have  any  natural  resources. 
Westerners,  by  and  large,  came  in,  and  geologists  and  others  pros 
pected  and  said  this  was  possible  oil-bearing  country.   By  and 
large,  the  Middle  Eastern  countries  did  not  have  the  money  to  do 
anything  about  it,  even  if  somebody  did  tell  them  they  thought  there 
was  oil  there.   So  then  the  Westerners  came  in  and  they  drilled  and 
found  oil  and  they  produced  the  oil,  and  then  as  time  went  by,  they 
employed  local  people,  especially  the  American  companies.   They 
trained  them,  they  gradually  acquired  expertise,  so  pretty  soon  they 
said,  "Well,  you're  developing  all  this  oil  and  you're  taking  it, 
selling  it  all  over  the  world.   We  want  to  get  into  that  business." 
[chuckles]  That's  the  whole  history  of  this  thing. 

There's  also  the  psychological  aspect,  which  perhaps  most 
Americans  don't  understand.   I  believe  that  of  all  the  major  coun 
tries  of  the  world,  this  is  the  only  one  where  mineral  resources, 
including  oil,  are  privately  owned.   They  are  owned  by  the  state 
everyplace  else.   Now  part  of  this,  I  suppose,  stems  from  the  old 
idea  of  countries  that  had  royalty.   The  crown  owned  all  the  natural 
resources.   Private  individuals  didn't  own  them.   Therefore, 


97 


national  pride  --  which  was  present  in  that  thing  you  read  about 
doing  it  with  mirrors  --  requires  that  these  things  all  belong  to 
the  local  crown  or  successors  to  the  crown  and  the  government.   For 
a  foreigner  to  own  them,  you  see,  is  contrary  to  their  basic  sense 
of  propriety. 

Here  it  wouldn't  make  any  difference.   Either  A  has  a  lease  or 
B  has  a  lease,  but  you're  not  offending  the  government  by  having  a 
lease  on  some  minerals.   In  fact,  the  government  leases  out  minerals 
to  people,  if  it's  government  land.   But  if  it's  private  land,  the 
private  owner  owns  the  minerals.   That's  one  of  the  reasons  that  a 
lot  of  these  agreements  are  difficult  to  negotiate,  you  see,  because 
of  that  psychological  difference  there. 

Hicke:    Maybe  this  is  an  impossible  question,  but  how  were  you  able  to  nego 
tiate  it  so  that  everybody  was  happy  and  all  these  mirrors  faced  in 
the  right  direction? 

McBaine:   Well,  I  think  it's  our  training  here  that  produced  this.   I  believe 
the  American  lawyers  made  the  suggestions,  again,  probably  because 
the  British  lawyers  didn't  have  the  experience  and  the  background  we 
did,  but  we  have  oil  and  gas  leases  here  --  the  oil  companies  do. 
They  don't  own  the  oil;  they  have  a  lease  and  they  have  a  right  to 
produce  the  oil.   So  we  used  the  same  concept  in  Iran.   The  Iranians 
own  the  oil  in  the  ground.   We  recognized  their  ownership  in  the 
ground.   What  we  had  was  the  right  to  drill  for  and  produce  the  oil. 
The  oil  only  became  ours  when  it  reached  the  surface. 

Hicke:    Oh,  so  it  really  does  work  both  ways? 

McBaine:   That's  right,  it  does. 

Hicke:    But  this  is  not  a  concept  that  is  well  known  anyplace  else? 

McBaine:   No,  because  of  all  these  places,  as  I  say,  where  the  crown  owns  the 
oil,  and  they  really  don't  have  lots  of  oil  and  gas  companies  with 
leases.   All  they  have  are  these  big  international  agreements,  these 
concessions,  so-called. 

Hicke:    I  see.   Well,  that's  really  a  fascinating  story. 

McBaine:   So  it  was  commonplace  to  me  as  an  oil  and  gas  lawyer,  but  a  new  idea 
to  the  Iranians.   That  recognized  their  sovereign  right  that  they 
owned  these  resources.   They  were  their  resources.   They  weren't 
ours;  we  weren't  poaching  on  their  resources.   For  a  given  amount  of 
money,  we  were  authorized  to  drill  for  oil,  produce  the  oil,  pay 
them  for  doing  so  --  the  proceeds  went  to  them  --  and  the  oil  only 
became  ours  when  it  was  in  a  barrel  on  the  ground. 

Hicke:    Beautiful.   [both  chuckle]   But  I  expect  it  was  difficult  to  get 
them  to  understand  this  concept  at  first. 


98 

McBaine:  Well,  yes,  except  basically  they  wanted  to  make  an  agreement,  of 

course.  That  gave  them  the  talking  points  they  needed  and  the  face 
saving  they  needed,  the  arguments  to  satisfy  the  nationalists,  who 
said  that  "these  foreigners  can't  own  our  oil,  those  are  our  God- 
given  resources,"  and  so  on.  We  said,  "Sure,  they  belong  to  you; 
we're  not  tinkering  with  them." 

Hicke:    When  you  were  called  to  work  on  this,  did  you  just  drop  everything 
else  you  were  working  on?  Turn  it  over  to  somebody  else? 

McBaine:  Oh,  I  had  to.  I  had  to.  I  don't  remember  what  was  involved,  but 
somebody  else  had  to  take  it  over,  because  I  was  tied  up  for  nine 
months  solid. 

Hicke:    Did  you  get  back  here  at  all? 
McBaine:   I  think  so,  maybe  once  or  twice. 
Hicke:    Just  on  a  quick  visit? 

McBaine:   Yes,  but  here  again,  the  question  about  reporting  back  to 

Mr.  Madison  comes  up.   Mr.  Lenzen,  for  one  thing,  was  a  meticulous 
reporter.   He  kept  a  daily  journal  really,  which  he  forwarded  to 
Mr.  Follis.   Mr.  Madison,  of  course,  was  in  constant  touch  with 
Mr.  Follis  and  Mr.  Follis  with  Mr.  Madison.   So  that  relieved  me  of 
a  great  deal  of  necessity  of  trying  to  keep  Mr.  Madison  involved, 
and  in  fact,  Mr.  Madison  really  wasn't  interested  in  all  of  these 
details  --  I  mean,  as  long  as  he  was  in  charge  of  servicing  the 
Standard  Oil  account,  as  long  as  Mr.  Follis  was  happy  in  the  first 
place,  Mr.  Lenzen  was  happy  and  told  Mr.  Follis  he  was  happy 
[chuckles],  and  Mr.  Madison  didn't  have  any  complaints  with 
Mr.  Follis  [both  chuckle],  he  only  wanted  to  know  the  results, 
really.  For  goodness  sake,  if  Mr.  Madison  spent  nine  months  of  his 
life  listening  to  all  this  detail  coming  in,  he  would  have  lost  his 
mind.   So,  how  it  worked  depends  on  the  circumstances. 


Caltex 


Hicke:    All  right,  where  shall  we  go  from  here? 

McBaine:   Let's  take  the  Caltex  [California-Texas  Oil  Company,  Ltd.]  breakup 

in  Europe  and  the  Caltex  Operating  Agreement.   Although  that's  skip 
ping  way  up  chronologically,  I  think  that  skips  up  to  the  -- 

Hicke:    Early  sixties  isn't  it?  I'm  not  sure.* 


1967. 


99 

McBaine:   We'll  look  up  the  date  and  put  it  in.   Caltex  is  a  jointly  owned 

marketing  and  distribution  company  in  the  Eastern  Hemisphere,  owned 
50-50  by  Standard  Oil  Company  of  California,  now  Chevron  Corpora 
tion,  and  Texaco.   Basically  when  these  concessions  have  been  taken 
around  the  world,  they've  been  taken  by  the  parent  companies.   That 
is,  Standard  Oil  Company  of  California,  as  you  may  know,  discovered 
oil  in  Saudi  Arabia.   They  had  at  that  time  no  markets  in  the 
Eastern  Hemisphere.   They  had  no  marketing  companies  because  they 
hadn't  had  any  oil.   Texaco  on  the  other  hand,  in  the  very  early 
days  when  they  discovered  oil  in  Texas,  for  reasons  I  don't  know 
developed  a  trade  with  Europe.   They  sent  refined  products  --  gaso 
line,  kerosene,  and  all  that  sort  of  thing  --  all  the  way  from  the 
Gulf  Coast  of  Texas  to  Europe,  and  they  established  marketing  com 
panies  in  the  various  European  countries. 

So  Standard  said,  "Well,  we've  discovered  this  oil  in  Saudi 
Arabia,  and  obviously  if  we're  going  to  keep  the  Saudi  government 
happy,  we've  got  to  move  the  oil;  we've  got  to  sell  it.   Otherwise 
they'll  take  the  concession  away  from  us."  The  first  thing  Standard 
did  was  go  to  Texaco  and  say,  "Look,  we'll  give  you  a  half  interest 
in  our  oil  if  you  give  us  a  half  interest  in  your  marketing  com 
panies."  There's  a  famous  story  that  the  agreement  to  do  this  was 
made  by  the  two  chief  executive  officers  of  the  companies  on  the 
back  of  an  envelope  [both  chuckle].   That's  how  large  events  were 
concluded. 

Hicke:     [chuckling]  The  good  old  days. 

McBaine:   Yes.   Then  more  oil  was  discovered,  for  example  in  Iran  when  both 
Texaco  and  Socal  were  participants  in  the  Iranian  consortium,  and 
the  supplies  of  oil  grew  and  the  Caltex  marketing  companies  grew, 
and  they  became  one  of  the  biggest  marketers  of  crude  and  products 
in  the  world.   Well,  obviously  there  were  a  lot  of  problems  that 
arose  between  the  two  partners.   There  were  differences  in  points  of 
view.   They  had  different  interests  in  different  places. 

Over  the  years,  those  increased  in  intensity.   There  were  a  lot 
of  difficult  legal  questions  there.   I'm  not  going  into  any  right 
now,  but  suffice  it  to  say  that  at  one  time  in  the  early  sixties,  I 
guess  it  was,  the  idea,  which  I  believe  originated  with  Texaco  --  it 
came  more  from  Texaco  than  it  did  from  Socal  --  was  to  break  up 
Caltex  and  split  it  between  the  two  parent  companies.   In  any  case, 
it  was  decided  to  break  up  the  Caltex  companies  in  Europe,  but  to 
leave  untouched  the  Caltex  companies  in  what's  referred  to  in  the 
oil  industry  as  East  of  Suez. 

Hicke:    Indonesia,  I  think  was  there. 

McBaine:   Well,  that's  part  of  it,  but  anything  further  East  [of  Suez]. 

Indonesia  is  another  different  story,  because  that's  a  producing 
country,  you  know. 

Hicke:    That's  right,  not  the  marketing  -- 


100 

McBaine:   Yes,  it's  also  marketing,  but  it's  a  big  producer.   So  in  any  case, 
it  was  decided  to  break  up  Caltex  in  Europe.  Well,  I've  forgotten 
exactly  how  many  countries  there  are;  perhaps  we  should  do  a  little 
editing  on  this  one  to  get  there.   Something  like  eleven  countries. 

Hicke:    We  can  check  it.* 

McBaine:   Yes.  To  negotiate  this  was  a  protracted  proceeding  which  took  about 
two  years.   Mr.  [Gwin]  Follis  was  still  the  chief  executive  officer 
of  Standard  at  the  time,  and  Mr.  Otto  Miller  was  the  president. 

Hicke:    Gus  Long  was  still  the  head  of  Texaco? 

McBaine:   Yes.   Mr.  Augustus  C.  Long  --  I  think  it's  C.  --  was  the  chairman 

and  CEO  of  Texaco,  and  the  president  was  Marion  Epley  [chuckles],  my 
friend  from  the  Iranian  consortium  days.  Mr.  Follis  appointed 
Mr.  Miller  as  the  negotiator  for  Standard  and  Mr.  Long  appointed 
Mr.  Epley  as  the  negotiator  for  Texaco.   So  we  started  out  on  this 
thing,  and  we  had  one  break  of  about  six  months,  where  we  broke  off 
negotiations,  but  apart  from  that,  for  about  two  years  Mr.  Miller 
and  his  principal  staff  man,  a  man  named  Fred  Boucke  --  he  was 
what's  referred  to  as  a  numbers  man  -- 


McBaine:   --  for  two  years  Mr.  Miller  and  I  would  regularly  get  on  a  Chevron 
jet.   It  was  a  North  American  Sabreliner,  I  believe;  it  was  a  small 
jet  which  was  very  fast.   We'd  go  across  the  country  with  one  stop, 
usually  in  Kansas  someplace,  and  we'd  fly,  let's  say  on  a  Sunday, 
back  to  New  York,  and  we'd  spend  four  or  five  days  negotiating  with 
Mr.  Epley.   He  really  didn't  have  a  Texaco  lawyer  with  him  all  the 
time,  being  a  lawyer  himself.   Then  we  would  fly  back  to  San 
Francisco,  and  each  side  would  work  on  its  own  papers  and  figures, 
judgments,  and  so  forth. 

It  was  a  complicated  process,  because  Caltex  had  not  only  mar 
keting  companies,  that  is  the  terminals  where  you  deliver  the  prod 
ucts  and  the  filling  stations  where  you  deliver  gasoline,  but  also 
they  had  refineries,  they  had  wholesale  terminals,  they  had  barge 
fleets  to  transport  the  products:   the  whole  panoply  of  a  huge 
operation  throughout  all  of  the  European  countries.   So,  as  I  say, 
we'd  all  regroup  and  do  a  lot  of  staff  work. 

The  following  week,  the  Texaco  people  would  fly  out  here.   We'd 
negotiate  for  a  week.   Usually  Mr.  Epley  would  have  somebody  with 
him,  but  not  always,  as  I  say,  a  lawyer.   Usually  there  were  only 


*     Chevron  Oil  Europe,  Inc.  assumed  ownership  and  operation  of 
facilities  in  Belgium,  (including  Luxembourg),  Denmark,  Germany, 
Greece,  Holland,  Ireland  (Eire),  Italy  (including  Sardinia),  Norway, 
Sweden,  Switzerland  (including  Liechtenstein),  and  the  United 
Kingdom. 


Hicke: 
McBaine: 


101 

three  or  four  of  us  in  the  negotiating  sessions,  including 
Mr.  Miller  and  myself.  They'd  fly  out  here,  and  we'd  negotiate  for 
either  four  or  five  days.   Sometimes  they'd  go  home  on  Saturday, 
sometimes  they'd  go  home  on  Friday. 

We  reached  an  impasse  at  one  time  and  broke  off  for  about  six 
months,  and  things  got  very  tense  at  that  time  because  of  accumu 
lated  feelings  on  both  sides  that  the  other  side  had  not  been  fair 
in  something  --  had  not  been  a  good  partner.   Then  we  finally  got 
over  whatever  hurdles  there  were,  and  the  parties  decided  to  resume 
negotiations  and  finally  went  back  to  work. 

It  was  a  very  difficult  and  delicate  negotiation.   One  of  the 
reasons  was  that  the  Caltex  trademark  was  in  effect  an  adaptation  of 
the  Texaco  red  star.   Obviously,  Texaco  felt  that  this  was  really 
their  trademark  and  felt  a  proprietary  interest  in  it,  even  though 
it  had  Caltex  on  it  instead  of  Texaco.   Whereas  Standard  said,  of 
course,  "We  bought  half  of  your  marketing  company,  and  one  of  its 
principal  assets  is  its  trademark  --  the  Caltex  star."  That  was  a 
problem. 

It  was  never  ultimately  solved  one  way  or  the  other,  but  it  was 
the  source  of  a  great  deal  of  difficulty  and  friction  between  the 
two  companies.   In  a  way,  it  was  sort  of  an  insoluble  problem, 
because  Texaco  was  certainly  not  going  to  give  up  its  trademark  for 
Texaco  Inc.,  and  neither  party  wanted  to  cancel  Caltex's  trademark 
and  start  with  some  brand  new  one;  they'd  both  suffer  from  that  in 
the  countries  where  Caltex  was  to  continue  to  operate.   So  it  was 
sort  of  an  insoluble  problem,  and  a  very  troublesome  one.  Well, 
anyhow,  finally  we  reached  an  agreement  on  what  should  be  done,  how 
the  Caltex  countries  in  Europe  were  going  to  be  split,  and  was  a 
given  country  going  to  be  split  between  the  two  companies  or  was 
country  A  going  to  Texaco  and  country  B  going  to  Standard? 

You  take  France,  I'll  take  Germany. 

Yes,  that  sort  of  thing,  you  see.   That's  what  took  so  long,  and  of 
course,  everybody  was  trying  to  figure  out  what  the  future  was  going 
to  bring,  sort  of  like  trying  to  play  a  poker  game.   I  think  in  view 
of  the  OPEC  developments,  of  course,  all  the  masterminding  that  had 
gone  into  that  [chuckling]  was  all  over  the  waterfall.   I  mean,  OPEC 
just  changed  the  economics  of  the  whole  thing  and  wiped  it  all  out. 

After  this  was  decided,  after  Mr.  Miller  and  Mr.  Epley  had  fin 
ished  their  work,  then  the  lawyers  had  to  go  to  Europe  and  carry  out 
the  agreed  division  in  each  one  of  the  European  countries.  That  was 
a  very  interesting  experience,  because  each  company,  Socal  and 
Texaco,  had  a  team:  a  lawyer,  a  businessman,  usually  a  tax  man,  and 
a  technical  man,  that  is,  one  who  knew  the  technical  problems  of  the 
oil  business.  The  local  Caltex  representative  would  make  the 

arrangements,  and  we'd  fly  into  a  given  country  and  sit  down  with 
the  local  Caltex  people  and  the  local  lawyers  --  each  side  had  a 
local  counsel  in  each  country  --  and  we  would  expect  to  conclude 


102 

this  thing  in  three  or  four  days.  We'd  go  to  Zurich  and  hole  up  in- 
the  Doldar  Grand  and  expect  to  finish  this  thing  in  four  days. 

My  impression  was  the  Europeans  had  never  seen  this  kind  of  an 
operation  before.   For  example,  I  remember  particularly  that  in  Bel 
gium  --  I  don't  know  if  this  is  still  true;  this  was  thirty  years 
ago  --a  Belgian  lawyer  is  not  allowed  by  the  customs  of  his  profes 
sion  to  call  on  a  businessman  client  in  his  office.   Most  Belgian 
lawyers  were  solo  practitioners,  by  themselves,  and  their  offices 
are  in  their  homes.   A  lot  of  them  are  at  any  rate,  and  the  one  we 
had  to  consult  there  was.   So  we  had  to  go  to  his  house.  Well,  you 
can  imagine  these  people  storming  in  like  this  with  say,  eight  law 
yers  or  eight  groups  with  a  lawyer  in  each  group,  and  saying,  "Sit 
down,  now,  we're  going  to  have  all  this  thing  done  in  three  days." 
[both  laugh] 

Hicke:    You  must  have  made  [Henry]  Kissinger's  shuttle  diplomacy  look  pale 
by  comparision. 

McBaine:   [chuckling]  Well,  I  think  we  did,  and  I  think  we  made  some  local 
people  unhappy  too,  probably. 

Hicke:    They  just  weren't  used  to  this  speed,  and  large  groups. 

McBaine:   Yes.   But  we  knew  what  we  wanted.   It  had  been  agreed  between  the 
two  parties  what  we  wanted.   There  wasn't  anything  to  negotiate. 
The  question  was  putting  it  into  effect  and  making  sure  that  it  com 
plied  with  all  the  local  laws;  from  our  point  of  view,  we  should  be 
able  to  do  that  with  dispatch.   Occasionally  there' were  quirks  that 
came  up  because  of  the  law  that  had  to  be  settled  between  the  par 
ties  as  a  matter  of  negotiation,  but  my  recollection  is  that  the 
representatives  of  the  company  there  had  the  authority  to  do  that. 
I  don't  remember  that  we  had  to  consult  back  to  San  Francisco  and 
New  York  to  settle  anything.   Maybe  we  did,  but  I  don't  remember  it. 
So  anyway,  we  went  [chuckles]  roaring  around  the  place  and  broke  up 
about,  I  don't  know,  $2  billion  worth  of  assets,  or  something  like 
that,  in  a  matter  of  weeks.   It  wasn't  too  long. 

[Interview  continued:   July  3,  1986 ]## 

Hicke:  Let's  go  back  to  the  Caltex  story,  which  we  were  right  in  the  middle 
of  before.  You  had  just  finished  talking  about  the  trips  to  various 
European  countries,  finalizing  the  change. 

McBaine:   As  I  said,  the  Caltex  reorganization  was  a  breakup  of  the  jointly 
owned  Caltex  companies  in  eleven  European  countries.   Some  of  the 
countries  went  to  Texaco,  some  went  to  Socal,  now  Chevron,  and  some 
assets  in  a  given  country  were  divided  between  the  two. 

Hicke:    Now  is  it  worth  explaining  why  countries  such  as  France,  Spain,  and 
Turkey  were  not  included? 


103 

McBaine:   Yes.   That  was  purely  a  matter  of  business  judgment.  It  was  felt 

that  in  those  countries  the  political  and  governmental  situation  was 
such  that  the  interest  to  both  parties  would  be  better  served  by 
continuing  the  joint  operations.   There  were  a  number  of  arrange 
ments  there  in  those  countries  that  were  with  the  governments  of  the 
host  countries,  and  it  was  felt  unwise  to  possibly  prejudice  those 
by  changing  ownership  and  operation  of  those  assets. 

Hicke:    By  arrangements,  you  mean  such  things  as,  I  think,  in  France  the 
government  owned  part  of  a  concession  or  something  like  that?  So 
the  government  itself  was  actually  involved  in  the  marketing? 

McBaine:   Well,  in  the  judgment  of  the  parent  companies,  Socal  and  Texaco,  it 
was  inadvisable  to  attempt  to  make  a  major  restructuring  in  those 
countries,  so  they  were  exempted  from  this  general  principal.   How 
ever,  there  were  provisions  agreed  upon  as  to  how  they  should 
operate. 

Now  in  addition  to  the  breakup  of  the  Caltex  companies  in  the 
eleven  European  countries  I  have  referred  to,  at  the  same  time,  or 
subsequent  to  major  agreement  on  the  Caltex  reorganization,  the  par 
ties,  Socal  and  Texaco,  entered  into  an  agreement  defining  and  pro 
viding  for  how  the  remaining  Caltex  should  be  operated.   As  I  men 
tioned  earlier,  Caltex  was  to  continue  to  operate  as  a  jointly  owned 
company  east  of  Suez  and  that  means  in  --  I've  seen  someplace,  I 
believe  --  some  sixty  different  countries  in  the  Eastern  Hemisphere. 

The  very  first  thing  the  parties  did  then  was  to  agree  on  what 
should  constitute  the  Caltex  area,  to  prevent  any  misunderstanding 
or  argument.   It  was  worked  out,  agreed,  and  then  we  very  carefully 
set  down  a  listing  of  the  countries  which  should  constitute  the 
Caltex  area.   It  was  provided  that  the  Caltex  area  should  mean  the 
geographic  territory  within  the  then  existing  boundries  of  the  named 
countries.   It's  important  to  realize,  of  course,  that  in  a  jointly 
owned  company  of  this  kind,  whatever  operations  Caltex  had,  50  per 
cent  of  those  operations  benefited  Texaco  and  50  percent  benefited 
Socal.   Whereas  if  one  or  the  other  of  the  parents  could  take  that 
business  or  perform  that  service  by  themselves,  then  that  parent's 
profit  from  doing  so  would  be  100  percent  instead  of  50  percent. 
This  was  a  problem  which  was  constantly  present  and  made  necessary 
some  agreement  to  try  to  eradicate  disputes  as  to  whether  one  or  the 
other  parent  company  had  a  right  to  do  something  in  such  and  such  an 
area  rather  than  or  in  competition  with  Caltex. 

Hicke:    In  fact  the  whole  thing  was  started,  if  I  remember  rightly,  by 
Texaco  buying  into  some  British  company? 

McBaine:   Yes.   Texaco  was  much  more  aggressive  at  that  juncture  than  Socal 
was  in  doing  such  things,  and  Caltex  did  market  in  the  United 
Kingdom  and  Texaco  bought  100  percent  interest  in  a  company  in  the 
Caribbean,  Trinidad  Leaseholds,  which  also  had  interests  in  Great 
Britain.   And  this  was  probably  the  major  cause  of  the  difficulty 
between  the  two  parties,  which  resulted  in  the  breakup  of  Caltex  in 


104 


Europe  and  the  creation  of  the  operating  agreement, 
to  the  operating  agreement  -- 


But,  to  return 


Hicke:    If  I  can  interrupt  once  more,  you  have  the  agreement  there  on  your 
desk,  and  it  looks  to  me  like  it's  at  least  an  inch  and  a  half 
thick,  and  maybe  two  inches. 

McBaine:   No,  the  operating  agreement  itself  is  only  thirty-nine  pages  long. 
There  are  several  other  subsidiary  agreements  which  are  probably  of 
equal  length,  but  basically  it's  a  charter  as  to  how  Caltex  is  to  be 
operated. 

To  take  another  example,  if  a  parent  company  should  supply 
something  to  Caltex,  e.g.,  some  crude  oil,  and  Caltex  then  markets 
that,  the  parent  who  makes  that  supply  benefits  because  it  has  moved 
a  certain  amount  of  crude,  for  example.   Even  though  it  benefits  by 
only  a  half  in  Caltex's  sale,  it  gets  100  percent  of  the  profits  in 
the  wholesale  prices  to  Caltex.   So  the  very  first  thing  you  have  to 
do  is  to  provide  how  the  parents  are  going  to  supply  Caltex  and  make 
sure  that  that  is  done  with  equal  fairness  to  both  of  the  share 
holder  or  parent  companies. 

Similarly,  there  are  problems  if  Caltex,  for  example,  wants  to 
take  some  particular  business  in  a  given  country,  and,  let's  say, 
one  of  the  parents  thinks  that  that  business  is  no  good  --  the  cus 
tomer  is  not  reliable  and  it's  not  worthwhile,  or  "We  might  not  get 
paid,"  and  so  forth.   The  other  parent  says,  "No,  we  should  take 
that  business.   Caltex  should  take  that  business."  Well,  if  the 
party  who  takes  the  negative  view  has  a  complete  veto,  then  neither 
Caltex  nor  either  parent  gets  the  business,  and  some  competitor  of 
the  two  parent  companies  will  get  the  business.   So  you  have  to  have 
some  arrangement  whereby  the  so-called  "fast  horse"  --  slang  lan 
guage  was  often  used  --  could  take  the  business  if  the  Caltex  man 
agement  did  not  want  to  take  it,  or  one  shareholder  said  he  wasn't 
going  to  participate  in  the  business. 

These  are  just  some  of  the  complicated  problems  that  had  to  be 
worked  out.   And  they  led  to,  as  I  have  said  before,  about  eighteen 
to  twenty-four  months  of  negotiations,  with  one  quite  long  break, 
before  all  these  things  were  worked  out. 

Hicke:    Was  there  a  lot  of  give  and  take? 

McBaine:   Oh,  yes.   There  certainly  was.   But,  you  see,  Caltex  is  a  gigantic 
company  and  its  sales  were  in  the  billions  of  dollars  annually.   So 
these  were  enormously  important  questions  that  were  being  debated 
and  worked  out.   I  am  sure  each  shareholder  had  in  mind  its  own 
objectives  as  well  as  those  benefiting  Caltex  and  thereby  each  50 
percent  shareholder  in  Caltex.   But  one  must  keep  in  mind  that  100 
percent  is  always  twice  as  good  as  50  percent.   And  this  sometimes 
led  to  a  difference  in  point  of  view.   There  could  be  a  legitimate 
difference  of  opinion  as  to  whether  the  shareholder's  interests  were 
more  important  in  a  given  situation  or  Caltex's  interests  were  more 
important,  particularly  on  a  long-term  basis. 


Hicke: 


McBaine: 
Hicke: 

McBaine : 


Hicke: 


McBaine: 


105 

Had  there  been  a  shift  in  the  companies'  positions  relative  to  mar 
keting  since  the  Caltex  formation?   I  know  that  when  they  were 
formed,  they  were  formed  because  Texaco  had  the  marketing  and  Socal 
had  the  crude.   Is  that  correct? 

Yes. 

Now  had  there  been  a  shift  in  this  balance,  so  that  Socal  had  devel 
oped  more  marketing  expertise  and  Texaco  had  more  crude? 

No,  I  don't  think  so.   Caltex  had  expanded  enormously  since  those 
early  days  when  that  original  agreement  was  made.   Here  again,  this 
had  been  working,  and  working  satisfactorily.   I  say  satisfactorily, 
not  perfectly,  but  satisfactorily  for  many,  many  years.   But  the 
operating  agreement  was  really  the  first  time  that  the  parties  had 
sat  down  and  written  out  just  how  things  were  to  be  done  with 
Caltex.   Most  of  the  things  had  been  done  in  the  past.   But  there 
was  no  legally  binding  agreement  that  they  should  be  done.   So  that 
led  to  uncertainty  on  the  part  of  one  or  the  other  of  the  share 
holders,  on  occasion. 

Oftentimes  one  shareholder  felt  that  the  other  shareholder  was 
not  doing  everything  it  could  for  Caltex,  whereas  the  first  share 
holder  was  doing  everything  he  could  for  Caltex.   In  the  operating 
agreement  one  of  the  most  important  provisions  at  the  very  beginning 
of  the  agreement  was  a  statement  of  general  objectives.   I  am  not 
going  to  read  them  all,  but  it  was  agreed  by  both  parties  that  "it 
is  intended  that  Caltex  be  a  strong,  viable,  and  competitive  company 
with  aggressive  sales  objectives." 

The  whole  bundle  of  agreements,  the  Caltex  reorganization 
agreement  and  the  Caltex  operating  agreement,  are  about  an  inch  and 
a  half  thick  and  represent  many,  many  months  of  negotiations  in  New 
York  and  in  San  Francisco  and  many  weeks',  if  not  months',  travel  in 
Europe,  working  out  all  the  details  in  the  eleven  different  coun 
tries.   It  was  really  a  monumental  task.   Basically,  however,  it's 
worked  well.   The  agreement  worked  out  still  exists,  although, 
interestingly  enough,  after  the  formation  of  OPEC  and  the  change  in 
world  crude  oil  prices  and  the  change  in  economic  conditions,  par 
ticularly  in  Europe,  the  setup  provided  for  in  the  reorganization 
agreement  no  longer  exists.   Chevron  has  sold  some  of  its  interests 
in  Europe,  but  the  agreement  as  to  operating  Caltex  still  stands, 
still  operates,  and  has  settled  many  an  incipient  argument,  I  am 


sure . 


Did  we  talk  about  who  worked  with  you  on  this  from  PM&S? 
Socal? 


And  also 


Well,  there  were  quite  a  number  of  people  who  worked  on  it  in  Socal 
I  think  I  said  in  the  beginning  Mr.  Miller's  number  one  assistant 
was  Mr.  Frederick  C.  Boucke. 


Hicke:    Yes,  you  did  talk  about  him. 


106 


McBaine:   He  was  a  so-called  "numbers"  man.   Mr.  Miller  of  course,  called  on 
all  sorts  of  people  in  the  company  who  were  familiar  with  the  par 
ticular  questions  that  came  up  from  time  to  time.   But  basically  it 
was  a  rather  small  group  of  people  that  worked  on  this.  There  were 
tax  questions,  of  course,  and  Socal  had  its  own  tax  department, 
headed  at  that  time  by  Scott  Lambert.   He  worked  with  some  of  the 
PM&S  tax  lawyers.   I  don't  remember  which  ones  particularly  right 
now;  the  tax  lawyers  were  a  separate  group,  really.  They  investi 
gated  everything  from  a  tax  point  of  view  to  make  sure  they  weren't 
providing  something  that  would  have  adverse  tax  consequences.  The 
people  who  were  helping  me  at  that  time  were  Tom  Haven,  Jim  Wanvig, 
Joe  Bare,  who  helped  with  the  drafting  of  various  things  and  worked 
with  Socal's  people  as  needed.   But  it  was  basically  a  fairly  small 
team  on  both  sides  as  compared  to  the  Iranian  consortium  affair, 
which  involved  so  many  more  companies  and  many  more  personnel. 

Hicke:    What  kind  of  previous  experience  or  precedent  was  there  to  draw 
upon?  Any? 

McBaine:   No.   Only  the  operations  of  Caltex  over  the  years  and  the  experience 
gained  by  both  sides.   They  told  us  what  the  problems  were  and 
things  that  needed  to  be  addressed.   I  would  guess  that  because  of 
the  long  period  of  time  over  which  that  operation  had  taken  place 
and  the  fact  that  there  were  two  50-50  owners  of  Caltex  with  nobody 
having  the  final  say,  that  between  them  they  had  unearthed  just 
about  every  problem  and  question  that  could  be  unearthed, 
[laughter] 

Hicke:    Equal  partnerships  can  be  difficult. 

McBaine:   That  is  right.   No,  I  don't  think  that  any  experience  other  than 
that  was  really  required. 

Hicke:     I  had  one  more  thing  that  I  wanted  to  ask.   Were  there  differences 
of  opinion  within  each  parent  company?   For  instance,  would  perhaps 
the  technical  marketing  people  have  one  objective  that  might  not  fit 
in  with  perhaps  the  financial  people's  view  of  the  problem? 

McBaine:  Well,  I  don't  know.  I  can't  speak  from  any  personal  knowledge  of 
that,  but  of  course,  that  is  always  true.  I  mean,  I  am  sure  that 
was  true  in  each  company.  So  the  different  points  of  view  had  to  be 
put  together  and  decided  by  an  officer  of  the  company  who  was  far 
enough  up  the  ladder  to  be  senior  to  both  or  all  of  the  points  of 
view  to  be  represented  and  therefore  could  make  a  decision.  That 
goes  on  constantly. 

Hicke:    But  that  would  have  been  resolved  before  it  got  to  you? 

McBaine:   That  would  have  been  resolved  before  it  got  to  the  negotiators,  yes, 
who  were,  as  I  say,  Mr.  Miller  and  Mr.  Epley. 

Hicke:    Also,  Germany  and  Greece  were  reorganized  a  little  bit  differently. 
Is  that  something  that's  important  to  talk  about? 


107 

McBaine.   Oh,  I  don't  think  so.   There  were  special  problems  there  which  had 
to  be  met  by  special  provisions,  but  those  too  were  worked  out,  and 
I  don't  think  they  are  of  historical  interest. 

Hicke:    Okay.   Well,  have  we  covered  Caltex? 

McBaine:   I  think  so.   The  general  story  is  about  all  that  is  worth  giving, 

because  to  start  into  any  of  the  details  of  this  thing  would  be  not 
only  probably  inadvisable,  but  would  be  voluminous.   I  don't  think 
it's  really  relevant  to  this  history. 

Hicke:    Could  we  say  that  it  was  a  unique  undertaking  and  probably  not  much 
else  like  it  has  ever  happened  since? 

McBaine:   Well,  so  far  as  I  know,  it  certainly  was.   But  I  am  not  a  student  of 
all  of  the  reorganizations  or  breakups  that  have  happened.   But  the 
oil  business,  of  course,  the  international  oil  business,  is  a  very 
large  business.   It  deals  in  billions.   As  witness  the  recent  acqui 
sition  of  Gulf  by  Chevron.   I  think,  so  far  as  we  knew  at  the  time, 
this  was  probably,  in  monetary  terms,  the  largest  business  arrange 
ment.   We  were  dealing  with  the  largest  business  arrangement  that 
had  ever  been  dealt  with.   I  have  no  idea  what  the  exact  valuation 
was  of  the  properties  divided,  but  it  did  run  to  several  billion 
dollars  worth.   The  problems  remain  the  same,  whether  you  are 
talking  about  a  thousand  dollars  riding  on  something  or  a  million 
dollars  riding  on  it.   The  legal  problem  is  all  the  same.   So  I 
think  that  is  about  everything  I  can  say  about  that. 


The  Safeway  Case 


Hicke:    Okay.   Shall  we  move  on  to  the  Safeway  case? 

McBaine:   Yes.   Another  interesting  case  which  I  participated  in  was  entitled 
Koster  v.  Lingan  A.  Warren,  et  aj..  ,*  including  Safeway  Stores,  Inc., 
in  the  federal  district  court  in  San  Francisco.   In  1959,  the  con 
trolling  shareholders  in  Safeway,  principally  Mr.  Charles  Merrill, 
the  founder  of  modern  Safeway,  felt  that  a  change  of  management  of 
Safeway  was  essential.   As  a  result  of  this,  Mr.  Warren,  the  presi 
dent,  and  several  vice  presidents  resigned.   A  new  management  team 
headed  by  Mr.  Robert  Magowan  was  elected  by  the  directors  to  manage 
Safeway 's  affairs.   Subsequently,  a  holder  of  200  shares  in  Safeway 
brought  a  suit  on  behalf  of  all  the  shareholders  against  the  old 
management  and  the  new  management  of  Safeway  and  Mr.  Warren  alleging 
that  certain  long-term  contracts  entered  into  between  Safeway  and 
the  former  officers  and  employing  them  as  consultants  violated  the 
fiduciary  obligations  of  the  directors  and  were  payments  for 


176  F.Supp.  459  (1959) 


108 

nonexistent  services,  which  constituted  a  waste  of  corporate  assets. 
The  plaintiff  also  complained  about  the  payment  by  the  company  of  a 
fine  of  $75,000,  which  had  been  levied  on  Mr.  Warren  under  an  anti 
trust  action  and  the  sale  of  a  certain  -- 


McBaine:   --  unit  of  Safeway  for  a  sura  alleged  to  be  less  than  the  true  value 
of  that  unit.   I  was  retained  to  represent  the  defendants,  Safeway 
Stores  Inc.  and  Robert  A.  Magowan,  the  new  president.   And  as  such, 
I  was  the  lead  counsel  in  the  litigation.   Other  lawyers  represented 
other  defendants.  This  was  what  was  sometimes  called  a  stock 
holders'  derivative  action  brought  against  the  corporation  as  a 
nominal  defendant  but  in  reality  for  the  benefit  of  the  corporation. 

The  defendants  then  moved  to  require  the  plaintiff  to  post 
security  pursuant  to  the  California  Corporations  Code  for  the  pay 
ment  of  the  expenses  incurred  by  the  defendants  in  the  event  the 
suit  proved  to  be  groundless.   The  security  asked  for  was  $240,000, 
and  in  order  to  prevail  on  these  motions,  the  defendants  had  to 
prove  that  there  was  no  reasonable  probability  that  the  prosecution 
of  the  cause  of  action  alleged  in  the  complaint  would  benefit  the 
corporation  or  its  shareholders.   We  undertook  to  do  so  before  the 
trial  court  and  did  so  successfully.   Possibly  this  sounds  simple, 
but  it  wasn't  quite  so  simple  in  the  doing.   But  nevertheless,  we 
did  do  it  successfully  and  the  plaintiff  declined  to  put  up  the 
security  and  therefore  the  case  was  dismissed  and  ended. 

An  appeal  was  taken  from  the  decision  of  the  United  States  Dis 
trict  Court  for  the  Northern  District  of  California,  and  again,  on 
appeal,  we  were  successful,  and  the  court  held  that  there  was  no 
reasonable  probability  that  the  alleged  cause  of  action  would 
benefit  Safeway  or  its  shareholders  and  the  dismissal  of  the  action 
was  upheld. 

There  were  numerous  arguments  made  that  I  think  are  of  no  par 
ticular  interest  except  to  a  lawyer  concerned  with  shareholders' 
actions.   But  it  was  a  very  interesting  case  because  of  the  human 
elements  involved  and  because  of  the  size  of  the  corporation  and  the 
relative  size,  at  that  time,  of  the  consultants'  contracts,  given 
the  old  management  and  the  complexity  of  facts  needed  to  bring  out 
that  these  were  not  simply  payoffs  but  were  good  faith  commitments 
of  the  corporate  assets.   In  the  light  of  some  of  the  cases  one 
reads  about  in  the  papers  nowadays  of  the  so-called  "golden  para 
chutes"  given  to  officers  of  corporations  which  have  been  taken  over 
by  some  other  corporation,  it  seems  strange  that  in  1959  a  case  like 
this  would  even  be  brought. 

Hicke:    That  raises  the  question  I  had:   the  plaintiff  was  a  stockholder? 
McBaine:   Plaintiff  was  a  stockholder. 
Hicke:    She  was  a  woman? 


Hicke: 


McBaine: 


109 
McBaine:   Yes,  it  was  a  woman. 

Was  she  representing  other  stockholders?  I  guess  my  curiosity  is 
aroused  as  to  why  she  would  bring  this  action. 

Yes.   As  I  say,  any  recovery  obtained  in  this  action  would  have  been 
for  the  benefit  of  the  corporation  and  its  shareholders  and  there 
fore  would  have  benefited  her,  although  it  would  have  been  pretty 
minuscule  recovery  by  her.   She  had  only  200  shares,  and  I  don't 
know  how  many  millions  of  shares  Safeway  has  outstanding  or  had  at 
that  time.   But  oftentimes  --  I  am  not  commenting  on  this  case  -- 
these  are  lawyers'  cases.   In  other  words,  the  lawyers  are  far  more 
interested  in  the  outcome  and  the  possibility  of  fees  in  obtaining 
an  outcome  than  the  named  plaintiff  is.   There  is  nothing  wrong  in 
such  a  suit  as  this,  or  a  lawyer's  interest  in  a  fee  in  it,  because 
this  is  one  way  that  a  small  shareholder  can  assure  justice  to  his 
or  her  company  without  financing  it  entirely  by  herself. 

But  she  was  taking  a  financial  risk,  it  seems  to  me. 

No,  she  was  taking  no  risk,  because  if  plaintiff  had  succeeded,  the 
court  would  have  awarded  fees  to  her  attorney  from  the  corporation. 


Hicke: 
McBaine: 


Hicke:    But  if  she  had  gone  to  court  and  lost,  she  would  have  had  to  pay  the 
fees . 

McBaine:   No.   In  all  likelihood  the  lawyer  simply  wouldn't  have  gotten  any 
fees  . 


Hicke: 

McBaine: 

Hicke: 

McBaine: 


Hicke: 
McBaine: 


It  was  on  a  contingency? 
Probably  on  a  contingent  basis. 

You  have  picked  out  this  case  among  many,  many  others  that  you  have 
handled,  so  can  you  explain  why  you  consider  it  so  significant? 

Well,  for  one  thing,  I  guess  I  considered  it  significant  because 
Safeway  was  a  very  large  corporation.   Mr.  Magowan,  who  succeeded  as 
the  president  of  Safeway  at  this  time,  was  a  long-time  friend  of 
mine.   As  a  result  of  this,  Safeway  became  a  client  of  Pillsbury, 
Madison  &  Sutro.   Still  is  today.  We  have  done  an  enormous  amount 
of  work  for  Safeway.   So  this  was  a  significant  case  and  I  dare  say 
a  significant  result  for  that  reason. 

' 

Did  you  continue  to  handle  cases  for  them? 

No,  not  all  of  them.   Some  in  the  early  days.   But  as  I  got  more  and 
more  involved  with  Standard's  matters,  I  simply  didn't  have  time 
enough  to  do  too  many  things  like  this.   Not  when  I  was  general 
counsel  for  Socal.   Others  of  my  partners  took  over  the  Safeway  mat 
ters  . 


Hicke: 
McBaine: 

Hicke: 
McBaine: 

Hicke: 
McBaine: 


Hicke: 


McBaine: 


110 

They  next  had  an  antitrust  case.  They  came  to  us  and  we  repre 
sented  then  in  that  case  and  handled  it  successfully,  and  I  think  my 
memory  is  correct  in  that  Mr.  [Richard]  MacLaury,  who  was  an  anti 
trust  specialist,  handled  that  case  for  them.   Since  that  time, 
Mr.  [Richard]  Odgers  has  done  a  great  deal  of  Safeway  work,  and  in 
the  last  ten  years  possibly  other  partners,  whom  I  am  not  aware  of, 
have  done  Safeway  work.   It  has  been  one  of  our  outstanding  clients. 
As  far  as  the  present  management  is  concerned,  Mr.  Magowan's  son, 
Peter  Magowan,  is  now  the  chairman  and  CEO  of  Safeway.   But  so  far 
as  Mr.  Robert  Magowan's  management  was  concerned,  this  was  where  it 
started:  with  the  Koster  case. 

Did  he  come  to  you  because  of  the  friendship  that  you  had? 

No,  I  don't  think  one  can  say  that.   I  think  he  came  because  of  the 
reputation  of  the  firm. 


And  your  reputation? 


That  I  am  not  able  to  judge.   I  think  that  --at  least,  I  hope 
that  --  he  knew  I  wasn't  incompetent,  because  of  having  known  me. 

I  don't  think  he  would  have  come  if  he  thought  that. 

I  don't  think  he  would  have  either.   He  would  have  objected.   But  I 
think  it  is  impossible  to  say  when  you're  representing  a  firm  as 
prominant  as  ours  and  with  a  record  of  work  that  we  have.   I  think 
the  background  of  the  firm  helps  every  partner  in  the  firm  get  busi 
ness  . 

Can  you  elaborate  a  little  bit  on  what  the  firm's  national  reputa 
tion  was  at  that  point? 

I  think  that  we  always  had  a  national,  and  indeed  international 
reputation  because  of  our  representation  of  Socal.   As  one  of  the 
major  international  oil  companies,  Socal  had  interests  throughout 
the  entire  United  States  and  throughout  much  of  the  civilized  world, 
and  in  almost  all  those  places  some  lawyer  from  Pillsbury,  Madison  & 
Sutro  had  been  there  and  knew  people  there.   So  we  had  a  wide 
acquaintanceship  with  other  lawyers  elsewhere.   Our  representation 
of  Socal  over  the  years  has  been  extensive.   I  don't  know  what  our 
batting  average  is,  but  it  is  pretty  high.   And  I  think  that  sort  of 
thing  meant  that  we  were  known  in  many,  many  places  that  otherwise 
we  probably  would  not  have  been  known  in.   Known  favorably. 

It  is  a  sort  of  accumulative  process.   A  reputation  builds  up 
over  the  years  if  a  firm  has  been  in  business  for  a  long  time,  as 
ours  has,  and  represents  stability,  competence,  experience,  knowl 
edge,  and  all  the  things  that  a  businessman  or  client  is  going  to 
take  into  account  when  selecting  lawyers.   Have  I  answered  why  I 
included  that  in  the  list  of  significant  cases? 


Hicke: 


Yes. 


Ill 

Buras  v.  U.S.  and  Chevron 


McBaine:   The  next  case  I  might  discuss  is  Leon  Buras ,  Jr.,  et  al . 

Petitioners  v.  United  States  of  America,  Chevron  Oil  Company,  et 
a_l.*  This  was  a  case  brought  in  the  federal  district  court  in 
Louisiana  to  recover  title  to  a  parcel  of  land  in  Louisiana  then 
standing  in  the  name  of  the  United  States  of  America,  on  which  the 
United  States  had  issued  an  oil  and  gas  lease  to  Chevron,  and  on 
which  Chevron  had  discovered  and  was  producing  from  an  oil  field 
valued  roughly  at  $500  million. 

The  facts  are  very  complicated.   In  the  1880s  Leon  Buras  and  a 
brother-in-law  began  hunting  and  trapping  on  marshlands  near  the 
mouth  of  the  Mississippi  River  then  belonging  to  the  United  States. 
In  1894,  the  brother-in-law  gave  to  the  Register  of  the  Land  Office 
of  the  State  of  Louisiana  a  sum  of  money,  part  of  which  was  contri 
buted  by  Buras,  to  buy  a  part  of  these  lands  in  the  event  they  were 
later  conveyed  to  the  State,  which  they  were.   The  Register,  who  had 
no  authority  to  accept  such  payments,  stole  the  money.   In  1894,  the 
crooked  Register,  to  satisfy  the  brother-in-law's  repeated  demands, 
apparently  gave  him  what  purported  to  be  patents  from  the  state  for 
the  lands.   There  was  no  record  of  these  in  the  State  Land  Office. 
Nevertheless  the  brother-in-law  had  these  "patents"  copied  into  the 
conveyance  records  of  the  county  in  which  the  lands  were  located. 

After  this,  the  facts  got  even  more  complicated,'1—  leading  up 
to  the  claim  that  the  Buras  heirs  now  owned  the  lands  in  question, 
and  not  the  United  States. 

If  this  claim  was  upheld,  Chevron  would  lose  its  oil  and  gas 
lease  and  might  even  be  liable  to  the  Buras  heirs  for  the  value  of 
the  oil  and  gas  removed  from  the  field. 

There  are  really  two  major  points  of  interest  in  this  case,  at 
least  to  my  mind.   The  first  is  that  all  these  questions  as  to  title 
to  these  lands  in  Louisiana  were,  of  course,  governed  by  Louisiana 
law,  which  is  not  like  the  English  common  law  and  the  statutes  pre 
vailing  in  the  remaining  states  of  the  United  States,  but  is  based 
on  the  Code  Napoleon  introduced  by  the  early  French  settlers  in 
Louisiana.   The  case  was  tried  in  the  district  court  in  Louisiana 
with  Chevron  being  represented  by  a  New  Orleans  lawyer,  a  long-time 
attorney  for  Chevron  in  that  area.   The  United  States  was  repre 
sented  by  an  attorney  from  the  Lands  Division  of  the  Department  of 
Justice  in  Washington. 


*     In  the  Supreme  Court  of  the  United  States,  October  1972, 
No.  72-1562. 

••'«'•    See  Appendix  C. 


112 


Hicke: 
McBaine; 


The  federal  district  judge  in  Louisiana  decided  the  case  in 
favor  of  the  plaintiffs.   The  exact  grounds  of  his  decision  are  not 
relevant  here,  but  because  of  the  importance  of  the  case  and  the 
size  of  the  value  of  the  property  involved,  the  decision  was  made 
not  to  turn  the  appeal  over  to  Louisiana  lawyers.   Instead  it  was 
decided  that  we  should  take  on  the  appeal  ourselves,  that  is,  PM&S. 

After  reviewing  the  record  of  the  trial  and  the  judge's  deci 
sion,  I  went  down  to  New  Orleans  and  holed  up  in  the  Sonesta  Hotel 
with  Don  Peterson  of  our  firm,  who  had  sat  in  with  the  Louisiana 
lawyer  during  the  trial.   We  spent  several  weeks  working  out  how  we 
would  appeal,  and  then  writing  the  brief  for  the  appellate  court. 
We  were  assisted  during  our  stay  in  New  Orleans  by  lawyers  from  the 
New  Orleans  firm  which  had  tried  the  case,  but  Don  and  I  put  the 
brief  together  and  assumed  responsibility  for  the  approach  taken  in 
the  brief  and  for  its  presentation. 

Perhaps  because  of  my  study  at  Oxford  of  Roman  law,  from  which 
the  Code  Napoleon  is  derived,  I  concluded  that  the  Louisiana  law  is 
not  as  esoteric  as  most  outsiders  are  led  to  believe,  but  differs 
more  in  its  terminology  than  in  its  concepts.  With  the  technical 
aid  and  advice  of  the  New  Orleans  lawyers  as  to  both  terminology  and 
concepts,  I  found  it  quite  possible  to  work  out  an  appellate  argu 
ment  and  write  an  appellate  brief  based  on  the  Louisiana  statutes 
and  decided  cases,  rather  than  common  law  cases. 

The  second  point  that  I  think  is  of  interest  to  the  case  was 
that  there  was  a  myriad  of  different  arguments  that  were  raised  by 
the  plaintiffs  in  the  case. 

What  was  that  rule  of  thumb  you  were  telling  me  about  complicating 
things? 

Yes.   There  is  an  axiom  in  the  law  that  all  lawyers  know  and,  I 
expect,  practice:   if  you  have  a  bad  case,  make  it  as  complicated  as 
possible.   If  you  have  a  good  case,  try  to  keep  it  as  simple  as  pos 
sible.  And  that  was  certainly  true  in  this  case.   As  you  can  see 
from  the  statement  of  facts,  there  are  many,  many  points  on  which  a 
legal  argument  can  be  made.   But  the  rather  surprising  thing  is  that 
after  I  waded  through  all  of  these  points,  the  case  in  my  mind 
really  came  down  to  a  single,  simple,  first-year  law  school  point: 
namely,  burden  of  proof. 

You  may  recall  that  from  the  facts  stated  above,  the  jury  made 
findings  in  favor  of  the  plaintiff  on  virtually  every  point,  except 
that  when  the  jury  was  asked  to  decide  whether  the  governor  of 
Louisiana  had  in  fact  signed  a  patent  to  the  land  to  Buras ' s  prede 
cessor,  the  jury  said  they  could  not  answer.   The  basic  principal  of 
law  is  that  one  claiming  a  piece  of  property  held  by  another  has  the 
burden  of  proving  that  he,  the  plaintiff,  has  title  to  that  prop 
erty.   And  when  the  jury  answered,  "We  cannot  say  whether  the  gov 
ernor  in  fact  signed  the  patent,"  the  plaintiff  Buras  failed  to  meet 
his  burden  of  proof.   And  all  of  those  other  complications,  with  all 
of  those  facts  --  generation  after  generation  and  transfer  after 


113 

transfer  and  recordings  in  the  county  recorder's  office  and  who  paid 
the  price  of  the  land,  et  cetera  --  all  of  that  was  beside  the 
point.   The  essential  element  of  the  case  the  plaintiffs  had  failed 
to  prove. 

Hicke:    That's  a  classic  example  of  taking  his  bad  case,  which  he  compli 
cated,  and  reducing  it  to  your  simplified  good  case. 

McBaine:   That's  right.   And  it  was  just  about  as  simple  a  thing  as  you  could 
possibly  reduce  it  to.  Well,  on  that  basis  I  went  to  Fort  Worth  and 
argued  the  case  before  the  Fifth  Circuit  Court  of  Appeals  and  sub 
mitted  our  brief,  and  the  Fifth  Circuit  then  held  unanimously  that 
the  plaintiff  Buras  had  failed  to  prove  his  case  and  affirmed  judg 
ment  for  the  defendants.   That  meant  that  the  United  States  retained 
its  title  and  Chevron  retained  its  oil  and  gas  lease. 

The  lawyers  for  Buras  then  filed  a  petition  for  a  writ  of  cer- 
tiorari  with  the  Supreme  Court  of  the  United  States,  in  effect 
asking  the  Supreme  Court  to  hear  the  case  on  appeal.   Don  Peterson 
and  I  then  wrote  a  brief  in  opposition  to  the  writ  of  certiorari, 
which  was  successful.   The  Supreme  Court  declined  to  hear  the  matter 
and  so  the  case  ended.   I  may  say  that  this  sounds  simple,  but  a 
petition  for  a  writ  of  certiorari  and  a  brief  in  opposition  to  such 
a  writ  is  one  of  the  most  ticklish  things  -- 


McBaine:   --  there  is  to  do  in  the  law.   There  is  a  strict  limit  on  the  number 
of  pages  that  may  be  filed.   I  believe  it  is  twenty-five  pages  in 
the  brief  in  opposition.   The  Court  hears  or  reads  probably  a  couple 
of  thousand  a  year  now.   So  it's  a  very  dangerous  thing  to  have  a 
case  that  has  some  human  appeal  in  it  up  before  the  Court  and  have 
to  win  purely  on  a  point  of  law.   It  is  always  a  very  ticklish 
matter.   We  were  delighted  to  have  the  Supreme  Court  decline  to 
issue  the  writ  of  certiorari  or  appeal. 

Hicke:    The  human  appeal  on  the  other  side  was  because  these  people  had 
thought  that  they  had  a  claim  to  the  land? 

McBaine:   Yes.   The  Buras  family  is  a  numerous  family  in  Lousiana.   They  lived 
down  in  the  delta  country,  and  they  were  trappers  and  fishermen  down 
there.   And,  as  I  say,  this  was  land  claimed  by  the  United  States. 
The  United  States  had  title  to  it  and  Chevron  had  an  oil  and  gas 
lease.   So  it  was  a  classic  case  of  David  and  Goliath  and  one  that 
was,  as  I  say,  very  touchy.   At  least  we  felt  it  was. 

Hicke:    Did  you  often  go  out  of  the  Ninth  District  to  argue  cases? 

McBaine:   Not  often,  but  sometimes.   Normally  that's  all  right,  because  you 

are  dealing  with  a  state  law  which  may  have  some  different  rules  but 
essentially  the  same  basis  and  philosophy  as  California  state  law. 
Or  it's  federal  law.   While  courts  in  different  circuits  may  have 
different  rules  on  the  given  question,  basically  a  lawyer  outside 


114 

that  circuit  can  read  those  cases  as  well  as  one  in  the  circuit. 
The  terminology  is  all  the  same.   So  there  is  no  difficulty  in  that. 

Louisiana  terminology  is  quite  different.   They  use  a  lot  of 
French  phrases  and  some  of  the  rules  of  law  are  different.   But  as  I 
say,  my  conclusion  was  that  for  anyone  who  had  even  a  little  experi 
ence  with  comparative  law,  that  is,  comparing  different  legal  sys 
tems,  it  wasn't  all  that  difficult.   Now  I  say  that  only  because  I 
had  expert  help  from  our  Louisiana  lawyers,  who  were  guiding  us 
every  step  of  the  way. 

Hicke:    But  they  weren't  able  to  find  the  solution  that  you  did? 

McBaine:  Well,  as  a  matter  of  fact,  there  was  some  difficulty,  because  the 
attorney  who  tried  the  case  and  regrettably  lost  it  did  not  agree 
with  my  analysis  of  the  trial  and  decision  and  did  not  agree  with 
the  arguments  and  approach  that  I  wanted  to  make  on  the  appeal.   He 
declined  to  have  any  participation  in  the  appeal  when  he  found  that 
he  did  not  agree  with  my  analysis.   I  stuck  to  my  burden  of  proof 
point  as  our  crucial  point  on  the  appeal  over  considerable  opposi 
tion,  and  as  far  as  I  was  concerned,  the  basic  law  involved  there 
was  precisely  the  same  in  Louisiana  as  it  was  anyplace  else  on  that. 
You  can  put  a  French  term  to  it  if  you  want,  but  the  burden  of 
proof,  the  basic  principle,  was  the  same  in  every  jurisdiction.   And 
the  Court  of  Appeals  for  the  Fifth  Circuit  had  no  difficulty  with  it 
at  all.   So  it  was  an  interesting  experience  from  that  point  of 
view.   I  was  fortunate  that  it  came  out  the  way  it  did,  because 
having  intervened  in  a  local  matter  down  there  and  taking  over 
myself,  it's  a  good  thing  for  me  that  it  turned  out  well, 
[laughter] 


Miller  Estate  Litigation 


McBaine:  The  next  matter  I  might  refer  to  is  the  litigation  arising  out  of 
the  trust  and  the  will  of  Henry  Miller.*  Henry  Miller  was  the 
founder  of  the  firm  of  Miller  &  Lux,-  Inc.,  which  anyone  familiar 
with  California  history  will  know  as  one  of  the  two  great  land  com 
panies  formed  by  the  early  settlers  in  California,  the  other  being 
the  Kern  County  Land  Company.   Both  the  Kern  County  Land  Company  and 
Miller  &  Lux  owned  hundreds  of  thousands  of  acres,  some  said 
extending  all  the  way  from  the  southern  to  northern  boundary  of 
California. 


*     Lombardi  v.  Blois,  Nickel,  and  Bowles, 
of  California,  No.  21,690  (1964). 


In  the  Supreme  Court 


115 

Henry  Miller  died  in  1916  leaving  an  inter  vivos  trust  and  a 
will,  both  of  which  left  his  trust  estate  to  his  daughter,  Nellie, 
and  her  husband  during  their  natural  lives.  On  the  death  of  Nellie 
and  her  husband,  the  income  was  to  be  paid  equally  to  the  children 
of  Nellie  and  her  husband  "per  stirpes,"  and  upon  the  death  of  all 
the  children  of  Nellie  and  her  husband,  the  corpus  of  the  trust  was 
to  pass  to  the  decendents  of  Nellie  and  her  husband  "per  stirpes  and 
not  per  capita"  absolutely  and  free  of  all  trusts.  The  Miller  trust 
had  caused  some  difficulties  before  the  final  termination  of  the 
trust,  pursuant  to  that  last  provision  that  I  referred  to. 

Nellie  and  her  husband  had  four  children:   Henry  Nickel, 
J.  Leroy  Nickel,  George  Nickel,  and  Beatrice  Nickel.   Beatrice 
Nickel  married  a  man  named  Bowles.   Henry  and  J.  Leroy  Nickel  had  no 
children.   George  Nickel  had  four  children,  and  Beatrice  Nickel 
Bowles  had  three  children.*  When  the  trust  terminated  on  the  death 
of  the  last  living  life  tenant,  Beatrice  Nickel  Bowles,  the  corpus 
of  the  trust  was  then  to  be  distributed  to  the  George  Nickel  and 
Beatrice  Nickel  Bowles  children  I  have  referred  to. 

The  question  arose  as  to  whether  the  corpus  of  the  trust  was  to 
be  divided  into  seven  shares,  one  to  go  to  each  of  the  children,  or 
whether  it  was  to  be  divided  into  halves,  one-half  to  the  children 
of  George  Nickel  and  one-half  to  the  children  of  Beatrice  Nickel 
Bowles,  which  would  mean  one-sixth  to  each  of  the  Bowles  children 
and  one-eighth  to  each  of  the  Nickel  children. 

Nobody  knew  at  that  time  what  the  value  of  the  Henry  Miller 
estate  was,  because  it  consisted  of  thousands  and  thousands  of  acres 
of  California  land,  the  value  of  which  was  problematic.   But  it  was 
variously  estimated  that  it  might  well  be  worth  $100  million  and 
perhaps  more,  depending  on  what  was  done  with  it,  of  course,  so  that 
even  the  difference  between  a  one-sixth  and  a  one-seventh  share 
could  mean  several  million  dollars. 

One  of  the  Nickel  children  retained  counsel  who  gave  the  Nickel 
children  an  opinion  that  the  proper  division  was  one-seventh  to  each 
of  the  several  children,  and  one  of  the  Bowles  children  then  came  to 
me  and  asked  for  an  opinion.   I  concluded  that  the  proper  distribu 
tion  under  the  trust  and  the  will  was  one-half  to  each  branch  of  the 
family  or  one-sixth  to  each  Bowles  child  and  one-eighth  to  each 
Nickel  child.   Incidentally  I  had  represented  Mr.  Henry  Bowles,  the 
Bowles  child  who  came  to  me  in  this  case,  in  an  earlier  question 
involving  the  administration  of  his  grandfather's  trust.   So  I  was 
well  aware  of  the  provisions  of  the  trust  and  will  and  had  also  done 
some  research  on  the  whole  matter.   The  conflict  of  the  two  opin 
ions,  one  for  the  Bowles  family  and  one  for  the  Nickel  family,  led 
to  litigation. 


See  following  page. 


MILLER  &  LUX  FAMILY  CHART 


The  following  chart  shows  tlic  above- 
mentioned  descendants  of  Nellie  Miller 
Nickel  and  J.  Lcroy  Nickel,  including  the 
beneficiaries  of  the  Henry  Miller  trust 
and  the  two  groups  of  remaindermen  now 
before  the  court,  the  names  of  the  last 
mentioned  being  underlined.  All  data  ap 
pearing  therein,  including  the  identities 
•nd  relationship  of  the  persons  listed, 
was  stipulated  to  in  the  proceedings  be 
low  by  all  parties  to  the  present  action. 


Henry  Miller 
(Died  10-14-10) 


Nellie  Miller  Nickel 
(Died  7-31-M) 


J.  Leroy  Nickel 
(Died  C-17-37) 


1 

Henry  Miller                        George  \ 

**•                    J-  Leroy                       Beatrice  Niclu 

1 

Nickel  (Died                      Nickel  (Died                Nickel,  Jr.                     Morse,  formerly 

without  issue                         2-23-62)                   (Died  with-                    Beatrice  Nickel 

2-7-09) 

out  issue                          Bowles   (Diec 

S-28-59)                            12-1 

11-62) 

[The 

[1 

'he 

Nickel 

Bom-les 

Remainder? 

en]                                                     Remain 

Jcrmen] 

1 

1 

Sally              George              John 
Nickel                                 Beverly 

Mary                              Henry             Amy                George 
Nickel                              Miller               lloivlo*            McNear 

Nickel            Nickel 

Lornbardi                       ]tnu  It-s            \j\\\  recce 

Uowles 

(Died 

11-24-54) 

Nina      John 


116 
[Interview  continued:   July  17,  1986 ]## 

Hicke:    You  indicated  that  this  afternoon  you  wanted  to  start  out  by  elabo 
rating  a  bit  on  the  Henry  Miller  estate. 

McBaine:  Yes.   I  am  not  sure  that  I  made  the  issue  in  that  case  as  clear  I 
should  have  made  it.   As  I  stated  before,  the  Henry  Miller  trust, 
both  the  living  trust  and  his  testimentary  trust,  provided  that  his 
estate  should  pass  to  the  descendents  born  in  lawful  wedlock  of  his 
daughter  Nellie  and  her  husband  "per  stirpes  and  not  per  capita." 
Stirpes  means  root  and  capita  means  head  or  person.   Therefore  the 
question  was  how  to  apply  that  formula  in  this  case. 

Henry  Miller's  daughter,  Nellie,  had  four  children,  two  of  whom 
died  without  issue:   Henry  Miller  Nickel  and  J.  Leroy  Nickel.   Of 
the  remaining  two  children,  George  W.  Nickel  had  four  children  and 
Beatrice  Nickel  Morse,  formerly  Bowles,  had  three  children.   The 
life  estate  to  Nellie  Miller  Nickel's  children  was  to  end,  of 
course,  on  the  death  of  the  last  of  the  four  children  of  Nellie  and 
the  remainder  then  go  to  the  descendents  of  Nellie  and,  of  course, 
of  Henry  Miller.   The  question  was:   at  what  stage  should  the  provi 
sion  that  the  property  was  to  pass  per  stirpes  or  by  the  root  and 
not  per  capita  to  take  place? 

The  descendents  of  George  W.  Nickel,  the  children  of  George  W. 
Nickel,  the  Nickel  remaindermen,  the  four  of  them,  took  the  position 
that  the  descent  of  the  property  per  stirpes  was  to  take  place 
beginning  with  their  generation.   In  other  words,  each  member  of 
their  generation  was  to  be  a  root  stock.   They  obtained  an  opinion 
from  counsel  to  this  effect.   The  Bowles  remaindermen,  the  three 
children  of  Beatrice  Nickel  Morse,  formerly  Beatrice  Nickel  Bowles, 
took  the  position  that  the  root  stocks  were  the  children  of  Nellie, 
namely  George  W.  Nickel  and  Beatrice  Nickel  Morse,  so  that  in  effect 
the  descendents  of  George  W.  Nickel  took  one  part  and  the  descen 
dents  of  Beatrice  Nickel  Bowles  Morse  took  another,  equal  parts. 
The  Bowles  remaindermen  asked  me  for  an  opinion  on  this  matter,  and 
I  gave  them  an  opinion  stating  that  that  was  correct.   This  is  what 
produced  the  litigation. 

The  litigation  was  filed  in  the  Superior  Court  for  the  City  and 
County  of  San  Francisco  and  the  State  of  California,  and  I  repre 
sented  Mr.  Henry  Bowles.   Other  lawyers  represented  the  two  Bowles 
children.   Several  different  lawyers  represented  the  various  George 
Nickel  children.   So  there  was  a  veritable  platoon  of  lawyers  par 
ticipating  in  this  from  the  beginning. 

The  matter  was  resolved  in  the  superior  court  in  a  somewhat 
unusual  way.   Without  getting  technical  about  it,  there  was  not  a 
full-fledged  trial  because  at  an  early  stage  in  the  proceedings,  I 
made  a  procedural  motion,  which  in  effect  would  dispose  of  the  case 
at  that  level.   The  reason  I  was  able  to  do  that  was  because  I  had 
given  an  opinion  to  Mr.  Henry  Bowles  regarding  the  administration  of 
the  trust  several  years  previously  and  so  was  thoroughly  acquainted 


117 

with  the  will  and  its  provisions,  whereas  perhaps  some  of  these 
other  lawyers  were  not. 

Mr.  Henry  Bowles  had  come  to  me  because  he  and  the  other 
remaindermen  were  dissatisfied  with  the  way  his  uncle,  J.  Leroy 
Nickel,  Jr.,  was  administering  the  trust.   Mr.  J.  Leroy,  Jr.,  was,  I 
believe,  not  the  sole  trustee  but  the  sole  family  member  acting  as 
trustee.  The  next  generation,  Mr.  Henry  Bowles  and  Mr.  George 
Nickel,  Jr.,  in  particular,  were  dissatisfied  with  the  fact  that 
their  uncle  would  not  permit  them  to  participate  in  the  affairs  of 
the  trust  in  any  way.   Mr.  Bowles  wanted  to  know  if  there  was  any 
thing  he  could  do  about  it  legally. 

After  studying  the  matter  carefully,  I  advised  him  that  there 

was  not.  That  is,  that  there  was  not  anything  that  he  could  do 

about  complaining  about  his  uncle's  position  unless  he  was  willing 

to  bring  a  suit  against  his  uncle  charging  him  with  mismanagement  of 

the  trust.   I  can  speak  freely  about  this,  because  my  opinion  was 

placed  in  the  record  in  the  public  hearing  of  the  suit  which  soon 
thereafter  took  place. 

Mr.  Bowles  advised  me  that  he  did  not  wish  to  bring  such  a  suit 
and,  in  effect,  carry  this  family  quarrel  into  the  public  domain. 
But  Mr.  George  Nickel,  Jr.  apparently  reached  a  different  conclu 
sion,  and  he  retained  an  attorney  who  did  file  a  suit  againt  Mr.  J. 
Leroy  Nickel,  Jr.,  and  charging  mismanagement  of  the  trust  and 
illegal  favoring  of  the  life  tenants,  that  is,  J.  Leroy  Nickel, 
George  W.  Nickel,  and  Beatrice  Nickel  Morse,  at  the  expense  of 
Mr.  George  Nickel,  Jr.,  and  Mr.  Henry  Bowles  and  the  other  remain 
dermen. 

This  litigation  went  on  for  some  time  without  really  much 
activity,  as  Mr.  J.  Leroy  Nickel  took  every  step  possible  to  avoid 
giving  his  deposition.   Mr.  C.  Ray  Robinson,  an  attorney  in  Merced, 
was  representing  Mr.  Nickel,  Jr.,  and  kept  pressing  to  obtain  a 
depositon.   He  ultimately,  after  about  a  year's  time  and  various 
court  orders,  obtained  a  court  order  compelling  Mr.  J.  Leroy  Nickel 
to  give  his  deposition,  but  soon  thereafter  Mr.  J. Leroy  Nickel  died, 
thus  ending  this  litigation. 

I  give  this  background  only  as  an  explanation  of  the  fact  that 
I  was  already  thoroughly  familiar  with  the  Henry  Miller  will  and 
trust  and  able  to  proceed  immediately  in  court  on  the  litigation 
instigated  by  the  Nickel  remaindermen  as  to  the  proper  division  of 
the  estate.   As  I  said,  I  think  some  of  the  other  attorneys  were 
not,  and  Mr.  Robinson  apparently  did  not  anticipate  an  early  show 
down  in  the  case.   He  was  an  accomplished  trial  lawyer  and  a  jury 
lawyer  and  I  think  anticipated  getting  his  case  before  a  jury.   I 
felt  that  that  was  not  in  the  interest  of  my  client,  Henry  Bowles, 
and  the  Bowles  remaindermen,  and  decided  that  we  would  put  our  fate 
in  the  hands  of  the  law  and  motion  the  judge  on  technical  motion. 

Hicke:    Can  you  explain  how  you  came  to  that  conclusion? 


118 

McBaine:   Well,  it  is  just  what  I  have  said.   It  is  more  difficult  to  go 

before  a  jury  when  the  case  is  as  complicated  as  this,  where  the 
legal  arguments  were  extremely  complicated,  but  the  personal  situa 
tions  were  not  so  complicated.   For  example,  what  would  someone 
unconnected  with  the  matter  consider  fair?  An  equal  division  of  the 
property  between  all  seven  children?  Or  would  they  consider  it  fair 
or  fairer  to  have  the  property  go  half  to  four  children  and  the 
other  half  to  only  three  children?  The  law  was  that  the  desires  of 
the  testator  in  the  will  were  to  be  followed.   But  where  there  were 
complicated  legal  arguments  in  support  of  both  positions,  the  jury 
might  well  conclude  that  an  even  division  to  all  seven  children  was 
fairer  and  make  that  finding. 

Accordingly  in  my  judgment,  we  were  far  better  off  if  we  could 
get  a  decision  by  the  judge  on  a  purely  legal  basis,  which  would 
mean  that  the  judge  would  follow  what  he  thought  were  the  desires  of 
the  testator,  Henry  Miller,  who  was  long  since  dead,  of  course. 

It  worked,  and  after  our  very  protracted  arguments  on  the 
pleadings  --  lasting  two  days,  I  believe  --  the  judge  ruled  in  our 
favor  and  entered  an  order  that  the  estate  was  to  be  divided  one- 
half  to  the  four  Nickel  remaindermen  and  one-half  to  the  three 
Bowles  remaindermen. 

The  losers  then  took  an  appeal  to  the  district  court  of  appeal, 
and  after  the  matter  was  thoroughly  briefed  and  argued  there,   the 
district  court  of  appeal  confirmed  the  judgment  of  the  superior 
court.   Before  that  appeal,  additional  attorneys  were,  brought  in  for 
the  matter.   A  hundred  million  dollars  attract  a  lot  of  attorneys  or 
make  people  think  that  it  is  worthwhile  to  employ  a  lot  of  attor 
neys  . 

After  the  district  court  of  appeal  affirmed,  the  next  step  was 
then  a  petition  by  the  losers  to  the  Supreme  Court  of  California  to 
hear  their  appeal,  which  was  not  mandatory  on  the  part  of  the 
Supreme  Court  but  discretionary  with  that  court.   The  Bowles  remain 
dermen,  including  myself  on  behalf  of  Henry  Bowles,  of  course 
opposed  this,  so  there  was  another  round  of  briefs  at  that  point. 
The  Supreme  Court  granted  a  hearing. 

Briefs  and  an  argument  were  then  held  before  the  Supreme  Court 
of  California  on  the  matter.   On  this  appeal,  a  close  friend  of  mine 
and  an  outstanding  trial  and  appellate  lawyer  in  San  Francisco, 
Arthur  B.  Dunne,  was  retained  by  the  children  of  the  Nickel  remain 
dermen.   This  produced  a  very  interesting  problem.   Mr.  Dunne,  as  I 
say,  was  not  only  an  eminent  attorney  and  well  known  to  the  court 
and  well  known  in  California,  but  an  outstanding  scholar.   He  wrote 
a  brief  which  I  still  remember  very  vividly.   It  was  an  Encyclopedia 
Britannica  on  "per  stirpes"  and  "per  capita"  and  filled  with  every 
kind  of  reference  anyone  could  conceivably  think  of.   There  were 
footnotes  on  every  page,  about  half  a  page  worth. 


119 

The  problem  was  that  the  time  for  arguments  before  the  Supreme 
Court  was  strictly  limited.   I  have  forgotten  whether  it  was  twenty 
minutes  or  possibly  half  an  hour.   But  I  think  it  was  only  twenty 
minutes  at  that  time,  and  the  number  of  pages  of  a  brief  one  could 
submit  were  limited.   If  I  had  tried  to  make  any  answer  at  all  to 
all  this  myriad  of  points  that  Mr.  Dunne  had  raised  in  support  of 
his  position,  the  confusion  would  have  been  such  that  it  would  have 
taken  superhuman  effort  for  anybody  to  retain  a  sense  of  clarity  out 
of  the  whole  thing.   So  it  was  a  very  difficult  matter  to  get  rid  of 
the  brief  with  that  limited  time  and  not  have  it  do  damage. 

Hicke:    His  brief  was  not  limited? 

McBaine:   Oh  no,  his  brief  was  limited,  but  only  in  number  of  pages.   It  was 
not  limited  in  the  number  of  points  he  could  make  or  the  number  of 
esoteric  and  abstruse  authorities  that  he  could  cite  for  it.   The 
brief  was  just  filled  with  that  sort  of  thing.   In  any  case,  we  had 
the  argument  before  the  Supreme  Court,  and  the  Supreme  Court  again 
affirmed  the  holding  of  the  superior  court,  and  so  the  squad  of 
eight  or  ten  attorneys  involved  in  this  thing  for  months,  months, 
and  months  finally  went  home. 

Basically,  the  case  was  a  long  shot.   I  really  thought  that  the 
case  should  have  never  been  brought  at  all,  but  then  of  course  that 
was  an  opposing  opinion.   It  was  a  long  and  bitterly  fought 
struggle,  I  think  largely  because  of  the  very  large  sum  of  money 
involved.   All  the  attempts  to  complicate  the  issues  in  the  end 
failed,  and  I  think  common  sense  as  well  as  the  express  words  of  the 
trustor-testator  prevailed. 

Hicke:    What  was  it  like  to  work  with  this  platoon  of  lawyers  as  you  did? 

McBaine:   Oh  well,  you  get  used  to  that  in  any  major  litigation,  especially  if 
you  are  representing  a  major  oil  company  like  the  Standard  Oil  Com 
pany  of  California.   In  most  cases  there  are  platoons  of  lawyers. 
Most  of  the  matters  involved  are  major  matters  and  so  I  was  very 
used  to  that  and  most  of  the  attorneys  involved  were,  or  perhaps 
some  of  them  weren't,  thinking  back  on  it.   But  in  any  case  that 
sorts  itself  out  all  right. 

Hicke:    What  does  it  involve  in  the  way  of  conferring  with  each  other  and 
deciding  who's  going  to  do  what? 

McBaine:   Well,  that's  a  problem,  and  in  major  litigation  often  produces 
rivalries  which  are  difficult  to  settle.   In  this  case,  for  the 
Nickel  remaindermen,  Mr.  George  Nickel,  Jr.'s  attorney  filed  the 
original  complaint.   Therefore  his  attorney,  C.  Ray  Robinson,  was 
the  lead  attorney,  so  to  speak,  for  the  Nickel  remindermen. 

As  for  the  Bowles  remaindermen,  Mr.  Henry  Bowles  was  the  senior 
member  of  the  Bowles  remaindermen.  He  had  a  younger  brother  who  was 
ultimately  also  involved  with  Miller  &  Lux,  Inc.,  and  a  sister.  But 
as  the  older  brother  of  the  Bowles  remainder,  he  was  the  senior  man 


120 

there,  and  therefore  his  attorney  was  more  or  less  automatically  the 
lead  attorney  for  the  Bowles  remaindermen.  What  differences  of 
opinion  there  were,  were  worked  out.   Actually,  I  don't  remember 
that  there  were  any  serious  differences  of  opinion  on  our  side. 
What  problems  the  other  side  had,  I  really  don't  know. 

Hicke:    Would  you  do  most  of  the  talking  in  court? 

McBaine:   Well,  the  time  was  divided  up.   Here  again,  the  principal  lead 

attorneys  were  given  a  larger  share  of  the  time.   If  they  didn't 
agree  among  themselves,  the  court  would  allot  the  time. 

Hicke;    I  see.   Had  you  worked  with  or  against  Mr.  Robinson  before? 

McBaine:   No,  I  had  not.   In  the  suit  that  Mr.  Robinson  brought  against 

J.  Leroy  Nickel,  Jr.,  for  mismanagement  of  the  trust,  I  did  not 
appear  as  counsel  for  anyone,  because  my  client,  who  had  obtained 
the  opinion  in  this  matter  from  me,  Henry  Bowles,  while  he  was  named 
as  a  party  in  that  suit,  did  not  actively  participate  in  it. 

Hicke:    There  had  been  a  lot  of  litigation  throughout  the  history  of  this 
trust? 

McBaine:   Yes,  there  had  been. 

Hicke:    And  is  there  still  more  going  on,  or  did  that  finish  it? 

McBaine:   No.   To  the  best  of  my  knowledge,  Miller  &  Lux  still  exists,  and 
they  may  have  had  some  litigation  --  I'd  be  surprised  if  they 
didn't  --  over  different  land  questions  or  other  legal  questions 
that  may  have  come  up.   But  there  is  no  sort  of  major  litigation 
that  has  come  up  involving  the  properties  that  I  know  of. 

Hicke:    Okay.   Does  that  wrap  up  Miller  &  Lux? 
McBaine:   I  think  so. 


The  F-310  Case- 


Hicke:    All  right,  if  we  are  finished  with  Miller  &  Lux,  let's  go  to  the 
F-310  case. 


*     In  the  Matter  of  Standard  Oil  Company  and  Batten,  Barton,  Dur- 
stine  &  Osborn,  before  Federal  Trade  Commission,  Docket  No.  8827 
(1971). 


121 

McBaine:   Yes,  all  right.   F-310  was  the  name  Socal  --  and  I'll  say  Socal 

because  it  was  known  as  Socal  at  that  time  --  had  given  to  an  addi 
tive  that  Socal  had  developed  for  its  gasoline,  which  would  reduce 
the  dirt  that  built  up  in  the  carburetor  and  some  other  parts  of  a 
gasoline  engine  and  thereby  reduce  the  dirty  emissions  from  that 
engine  . 

In  the  '60s,  you  may  remember  that  there  was  a  tremendous 
interest  in  the  environment  and  tremendous  interest  in  reducing  the 
pollution  in  the  environment,  attributable  mainly,  I  think,  to  the 
appearance  of  smog  in  the  cities  of  the  United  States  and  including, 
certainly,  Los  Angeles.   Environmental  groups  like  the  Sierra  Club 
and  many  other  environmental  groups  were  zealously  campaigning 
against  all  forms  of  pollution,  and  the  automobile  became  in  their 
eyes  a  terrible  manifestation  of  progress  in  the  modern  world. 
There  were  enthusiasts  who  took  to  the  hills  and  did  away  with  all 
plumbing  and  such  things  as  that.   Lived  off  of  nature.   Didn't  want 
any  pollution  of  any  kind.   No  smoke,  no  nothing.  This  was  a  very 
strong  wave  of  opinion  in  the  United  States. 

So  Socal  thought  when  they  developed  this  gasoline  additive 
that  they  had  done  something  which  would  be  of  great  public  interest 
and  would  give  them  a  lot  of  credit  with  the  public  and  at  the  same 
time,  of  course,  increase  their  gasoline  sales.   So,  in  order  to 
advertise  this  thing  properly,  they  had  conducted  a  whole  series  of 
very  elaborate  tests.   One  they  did  with  several  hundred  automobiles 
in  the  Rose  Bowl  in  Pasadena. 


McBaine:   They  carefully  measured  all  the  results  of  the  test.   Then  the 

problem  was  how  to  advertise  this  test.   Well,  of  course,  the  adver 
tising  agency  got  hold  of  it  and  they,  with  the  company  engineers, 
devised  some  more  tests.   One  of  them  was  a  test  with  a  balloon, 
where  a  balloon  was  attached  to  the  exhaust  pipe  of  a  car  with  a 
dirty  engine.   The  balloon  filled  up  with  dirty  gray  or  black  smoke, 
soot  from  the  exhaust  and  various  other  other  pollutants.   Then  they 
took  a  similar  car  which  had  run  on  Chevron  gasoline  with  F-310  and 
hitched  it  up  to  a  balloon.   They  then  pictured  that  balloon  when  it 
was  filled  with  exhaust,  which  was  apparently  clear  and  certainly 
white.  There  were  others,  but  that  was  sort  of  the  key  ad. 

Well,  certainly  to  my  astonishment,  and  I  think  to  the  aston 
ishment  of  most  of  the  people  in  the  company,  the  public  reaction, 
instead  of  being  pleasure  and  enthusiasm  that  there  was  something 
that  would  reduce  smog  and  pollution,  was  almost  overwhelmingly 
negative  --a  thing  which  frankly  I  couldn't  understand  then  and  I 
don't  understand  now.   Other  gasoline  companies  reacted  negatively 
because  they  saw  this  as  a  real  competitive  advantage  to  Chevron. 
And,  in  fact,  some  of  them  had  had  detergents  of  some  kind  that  kept 
the  engines  of  their  users  cleaner  than  they  would  otherwise  be. 
But  I  think  subsequently  it  became  clear  that  none  were  as  effective 
as  F-310.  The  Sierra  Club  and  others  went  into  sort  of  a  frenzy 


Hicke: 


McBaine; 


Hicke: 
McBaine: 


122 

over  this  new  development,  complaining  about  it  and  raising  every 
conceivable  sort  of  an  objection  to  it. 

It's  extremely  difficult  for  me  to  understand  any  logical  basis 
for  all  of  this.   I  tried  to  think  why  this  enormous  negative  reac 
tion.   There  were  such  extreme  statements  made  as  that  automobiles 
ought  to  be  banned,  the  automobile  was  a  terrible  thing,  we  could 
get  along  without  it,  and  so  forth  and  so  on.   Not  very  many  people 
believed  that,  but  it  shows  the  extremity  of  the  feeling  against 
this  whole  thing. 

Also,  the  environmentalists  were  at  that  time  trying  to  per 
suade  the  United  States  government  to  put  pollution  limits  on  the 
car  builders  of  the  United  States,  so  that  you  couldn't  build  a  car 
unless  it  was  clean  and  free  of  all  pollution.   Of  course  not  all 
pollutions  were  visible  in  the  way  that  soot  is,  that  black  dirt 
that  comes  out  as  soot.   Some  of  this  other  pollution,  such  as 
carbon  monoxide,  is  also  very  serious  because,  while  it  may  be 
translucent,  it  can  combine  with  other  chemicals  and  form  smog. 

Ultimately  the  FTC  [Federal  Trade  Commission] ,  responding  to 
all  of  this  public  criticism  and,  I  regret  to  say,  I  think  com 
plaints  from  other  oil  companies,  which  can't  have  been  motivated  by 
anything  other  than  competitive  dislike,  the  FTC  started  to  investi 
gate  this  thing. 

Could  it  have  been  that  the  advertising  just  brought  the  pollution 
problem  prominently  into  view? 

Yes,  it  did  bring  it  prominently  into  view.   I  think  there  were  a 
great  many  people  who  believed  that  if  it  became  established  that 
detergents  in  the  gasoline  of  the  millions  of  automobiles  in  the 
United  States  could  really  reduce  these  pollutants  in  the  air,  so 
that  smog  was  no  longer  a  major  problem,  all  of  these  efforts  to 
control  the  automobile  builders  in  Detroit  --  to  make  them  redesign 
their  engine  so  they  would  not  emit  any  pollutants  --  would  evapo 
rate  and  go  away.   At  least,  this  is  my  own  analysis.   I  can't 
understand  any  other  reason  why  people  would  object  to  something 
which  really  obviously  was  doing  good.   The  environmentalists  were 
afraid  that  the  doing  good  would  dampen  all  of  the  big  national 
movements.   They  really  wanted  to  compel  the  automobile  builders  -- 
General  Motors  and  Ford  and  Chrysler  and  American  Motors  --  to  build 
different  engines. 

That  makes  sense. 

They  never  admitted  that,  but  this  is,  to  my  mind,  the  only  sensible 
reason  for  this  to  me  totally  surprising  and  surprisingly  intense 
comdemnation  of  this  new  development. 

So  the  FTC  sent  investigators  out.   Typical  of  the  FTC,  they 
sent  a  young  man  from  the  Los  Angeles  office  up  here  and  he  wanted 
some  information  from  me. 


123 

You  asked  me  about  how  one  decides  who  does  what  in  our  office. 
Well,  I  was  the  general  counsel  of  the  company  and  it  seemed  to  me 
and  to  the  officers  of  the  company  that  this  was  something  I  should 
handle  myself.   And  I  did,  right  from  the  word  go.   The  thing  had 
started  just  before  Mr.  [Francis]  Kirkham  retired,  and  I  had  just 
succeeded  him.   The  FTC  hadn't  instituted  any  investigation  when 
Mr.  Kirkham  retired.   But  as  soon  as  they  did,  I  got  into  it,  and  I 
stayed  with  it  all  the  way  through. 

Anyway,  this  young  man  came  up,  and  he  was  very  nice.  He  said 
he  was  just  making  an  investigation;  he  said  was  very  pro-Socal.   He 
was  a  stockholder  in  Socal  himself.   Well,  this  kind  of  approach 
didn't  impress  me  much,  and  particularly  in  light  of  subsequent  cir 
cumstances,  I  don't  know  what  his  purpose  was,  but  I  can't  say  any 
thing  good  for  it. 

Hicke:    He  just  came  in  for  a  friendly  chat? 

McBaine:   Yes.   And  he  was  pro-Socal  because  he  was  a  stockholder  in  Socal. 
Anyway,  soon  afterwards  he  recommended  that  a  complaint  be  issued 
for  misleading  advertising.   The  FTC  in  those  days  issued  every  kind 
of  a  complaint.  When  they  issued  a  complaint,  they  put  in  every 
thing  they  could  think  of.   In  other  words,  there  was  no  attempt  to 
be  judicious  on  their  part.  They  acted,  in  this  case  and  several 
others  --  and  I  will  come  to  the  FTC  v.  Big  Eight  Oil  Companies  -- 
the  same  way.  They  acted  as  if  they  were  investigating  Al  Capone's 
organization. 

As  another  example,  I  believe  it  was  after  the  complaint  had 
been  issued  and  two  FTC  attorneys  assigned  to  the  case,  one  a  woman, 
Socal  had  a  press  conference  in  Los  Angeles  and  introduced  F-310 
there.   They  had  it  at  the  Century  Plaza  Hotel.   They  took  a  big 
ballroom  and  invited,  I  guess,  gasoline  dealers  and  newspaper  people 
and  various  environmental  groups,  the  public  that  would  be  inter 
ested,  and  made  a  presentation  about  F-310.   They  were  very  proud. 
They  thought  they  had  made  a  real  contribution  to  the  smog  problem 
and  the  problem  of  air  pollution  in  this  country. 

These  two  FTC  attorneys  walked  in;  it  was  open  to  the  public. 
I  saw  them;  I  had  met  them  and  knew  who  they  were.   After  the  pre 
sentation  was  over,  the  company  served  a  buffet  lunch  in  the 
adjoining  room,  free  to  everybody  who  had  come  to  the  press  confer 
ence.   I  was  standing  near  these  two  lawyers  when  the  press  confer 
ence  terminated  and  the  luncheon  was  announced.   I  said,  "Would  you 
like  to  have  lunch?"  So  in  they  went  and  had  this  buffet  luncheon. 
It  was  reported  to  me  sometime  later  that  this  woman  lawyer,  one  of 
the  two  of  them,  had  gone  back  to  Washington  and  had  told  her 
cohorts  in  the  Federal  Trade  Commission  that  when  she  was  out  in 
California,  Socal  had  attempted  to  bribe  her  by  giving  her  free 
meals . 


Hicke:    That's  unbelievable! 


124 

McBaine:   Well,  I  cite  this,  and  I  will  cite  it  again,  because  this  is  the 

kind  of  an  attitude  that  permeated  the  entire  Federal  Trade  Commis 
sion  at  that  time.   You  wouldn't  believe  it.   I  mean,  you  thought 
you  were  a  law-abiding  American  citizen,  and  you  were  treated  as  if,- 
as  I  say,  you  were  an  acknowledged  member  of  Al  Capone's  gang. 

Ultimately  the  Congress  even  got  onto  this  thing.   Some  years 
subsequent  to  this,  as  a  result  of  that  kind  of  behavior  on  the  part 
of  the  FTC  staff,  the  Congress  cut  off  the  funds  of  the  Federal 
Trade  Commission.   You  may  not  remember  this;  but  it  was  in  the 
daily  newpapers .   The  whole  staff  of  the  Federal  Trade  Commission 
didn't  go  to  work  for  four  or  five  days  because  Congress  refused  to 
appropriate  any  money  for  them  and  left  them  without  any  pay  and 
without  any  jobs  for  about  four  or  five  days. 

Hicke:    Probably  wasn't  nearly  long  enough. 

McBaine:   It  wasn't,  was  it?   [laughter]   I  think  it  sort  of  brought  them  back 
to  some  common  sense.   But  it  was  that  way  all  through  this  F-310 
case,  which  I  was  particularly  sensitive  about,  because,  as  I  say,  I 
couldn't  understand  the  reasons  for  it  in  the  first  place.   And  then 
to  have  these  people  behave  this  way  seemed  to  me  outrageous.   It 
still  seems  to  me  outrageous. 

Hicke:    Even  in  court,  aren't  you  supposed  to  be  innocent  until  proven 
guilty? 

McBaine:   Well,  that's  supposed  to  be.   As  I  say,  they  became  so  partisan. 

Instead  of  conducting  themselves  in  a  dignified  way,  they  went  at  it 
as  if  they  were  dealing  with  drug  smugglers  and  people  like  that, 
instead  of  the  cream  of  American  business. 

So  we  had  a  long  investigation  about  this  thing,  and  the  com 
mission  did  issue  a  complaint.   The  complaint  again  exemplified  this 
kind  of  attitude  I  am  talking  about.   They  found  everything  wrong 
conceivable.   They  charged  that  these  ads  were  fraudulent  and  mis 
leading  in  every  conceivable  way.   They  never  once  in  the  complaint 
admitted  that  F-310  did  clean  up  dirty  engines  and  would  keep  a  new 
engine  clean  if  used  in  it,  more  than  ordinary  gasoline  without  any 
such  additive  in  it  would  do. 

Basically  what  it  finally  came  down  to,  in  the  case  tried 
before  the  Federal  Trade  Commission,  is  that  the  Federal  Trade  Com 
mission  did  recognize  that  all  these  tests  were  valid,  that  the 
additive  did  help  clean  dirty  engines  and  did  keep  clean  engines 
cleaner  than  if  it  were  not  used.   Nevertheless,  they  found  that  the 
pictures  of  these  two  balloons,  where  one  was  almost  black  and  the 
other  one  was  almost  white,  were  misleading,  because  people  would 
think  there  weren't  any  pollutants  at  all  in  the  white  balloon. 
Well,  the  ads  didn't  say  that,  and  no  such  claim  as  that  was  made. 
The  idea  was  to  contrast  clean  air  versus  dirty  air.   There  was  no 
language  that  said  that  the  air  was  absolutely  clean.   Nobody  ever 
made  such  a  claim.   But  in  any  case,  caught  up  in  all  of  this 


Hicke: 


McBaine: 


125 

national,  almost-hysteria  over  this  smog  problem  and  air  pollution, 
the  Federal  Trade  Commission  did  make  this  order  and  banned  all  fur 
ther  advertisements  of  this  kind. 

Well,  of  course,  that  in  a  sense  killed  the  product.   I  mean, 
it  was  no  good  if  the  Federal  Trade  Commission  said,  "You  can't  use 
these  ads,"  and  there  was  all  the  publicity  about  these  ads,  because 
the  whole  matter  received  publicity  all  over  the  United  States.   The 
fact  that  you  had  a  good  product,  which  did  contribute  to  cleaning 
up  the  air  --  cleaned  up  the  engines  and  thereby  contributed  to 
cleaning  up  the  air  --  that  just  went  by  the  boards  in  all  of  this 
hubbub . 

As  one  interesting  example,  the  automobile  manufacturers,  as 
you  may  know,  have  to  make  mileage  tests  on  their  new  models  and 
then  they  are  able  to  advertise  an  estimate  of  so  many  miles  per 
gallon  on  their  new  cars.   All  three  of  the  major  motor  companies  at 
that  time  --  I  am  not  sure  whether  AMC  was  in  this  or  not,  but 
General  Motors,  Ford,  and  Chrysler,  all  three  --  used  Chevron  with 
F-310  gasoline  to  conduct  their  tests  on  their  new  automobiles  so 
they  would  get  the  cleanest  engines  and  the  highest  possible  mileage 
ratings.   That  gives  you  some  idea  of  what  those  people  in  the  busi 
ness  thought  about  it. 

But  that  didn't  slow  down  the  FTC  at  all.   There  was  never  one 
word  of,  not  only  no  word  of  appreciation,  but  not  one  word  even  of 
acknowledgment  that  the  company  had  done  anything  good  at  all,  you 
see.   They  [Chevron]  were  just  a  "bunch  of  crooks,  crooked  America," 
for  having  phonied  up  these  advertisements. 

As  you  can  see,  I  am  still  upset  about  it.   I  was  upset  about 
it  then.   I  still  am  now.   And,  as  I  say,  the  attitude  that  they 
took  and  their  actions  were  so  bad  that  ultimately  Congress  cut  them 
off  with  no  appropriations  and  told  them,  "You  have  got  to  clean  up 
your  act." 

Well,  that  was  the  case.   So  they  entered  an  order.   The  order 
was  then  appealed.   I  did  not  conduct  the  appeal  and  now  I  have  for 
gotten  what  I  was  doing. 

Did  someone  from  PM&S  take  it? 

Yes.   The  net  result  was  that  the  court  of  appeals,  while  they 
affirmed  the  Federal  Trade  Commission's  order,  really  eviscerated 
the  order  so  that  it  came  to  very  little.   And  in  their  opinion, 
they  did  recognize  the  validity  of  this  product,  that  it  was  a 
genuine  product  and  did  do  genuine  good.   But  it  did  affirm  the 
finding  of  the  Federal  Trade  Commission  that  these  balloon  ads 
showing  the  white  and  the  black  balloons  were  overdone.   So  after  a 
couple  of  years  of  struggle  and  a  tremendous  amount  of  effort  and  a 
lot  of  money  spent,  it  came  down  to  virtually  nothing,  except  that 
they  economically  ruined  what  every  fair  person  admitted  was  a  good 
product . 


126 
Hicke:    And  F-310  is  no  longer  used? 

McBaine:   It's  used,  but  it's  not  used  under  that  name.   Various  other  com 
panies  have  other  additives,  too.   And  how  they  compare  in  effi 
ciency,  I  have  no  idea. 

Hicke:    Well,  did  the  ad  agency  then  come  in  for  a  fair  amount  of  criticism? 

McBaine:   Oh  yes.   Very  much  so. 

Hicke:    They  had  actually  done  the  balloon  ad? 

McBaine:   That's  right.   And  of  course,  any  ad  man  is  going  to  press  for  the 
most  dramatic  thing  he  can  get.   And  I  expect  they  probably  pushed 
the  engineers  harder  and  harder  and  devised  more  dramatic  formats 
for  the  ads . 

Hicke:    Do  you  recall  who  the  ad  agency  was?" 
McBaine:   No,  I  don't. 

Hicke:    Okay,  we  don't  have  to  worry  about  that.   I  am  also  interested  in 
the  FTC  hearings.   After  you  had  a  hearing  before  the  FTC  and  they 
gave  you  an  order,  then  it  sounds  if  you  went  into  the  regular  court 
system  from  there. 

McBaine:   Yes,  the  regular  federal  court  system:   to  the  federal  court  of 
appeal . 

Hicke:     Is  it  true  of  most  regulatory  agencies  that  you  can  appeal  to  the 
regular  court  system  for  a  hearing? 

McBaine:   Yes. 

Hicke:    And  then  from  then  on,  it's  the  normal  procedure? 

McBaine:   Yes.   It  is  treated  as  another  case  in  the  federal  courts.   I  don't 
think  either  side  asked  for  a  hearing  in  the  Supreme  Court.   I  think 
by  that  time  the  Federal  Trade  Commission  was  ready  to  be  done  with 
it.   I  think  by  that  time  they  were  coming  under  so  much  criticism 
that  they  didn't  continue.   And  the  appellate  court's  order  was,  as 
I  say,  almost  innocuous  so  far  as  Socal  was  concerned. 

Hicke:    What  are  the  differences  in  preparing  for  a  hearing  case  as  opposed 
to  preparing  for  a  court  case? 

McBaine:   Well,  let's  discuss  that  a  little  more  when  we  get  to  the  next  one. 
Hicke:    Okay.   Fair  enough. 


Batten,  Barton,  Durstine  &  Osborne,  Inc.  of  San  Francisco. 


127 


FTC  v.  Exxon 


McBaine:  The  next  matter  that  I  was  going  to  mention  was  what  we  called  the 

FTC  v.  The  Big  Eight.*  In  the  early  '70s,  the  Federal  Trade  Commis 
sion  filed  a  complaint  against  the  eight  major  United  States  oil 
companies  charging  them  with  unnamed  and  unspecified  violations  of 
the  antitrust  laws.   Under  the  antitrust  laws  in  this  country,  both 
the  Antitrust  Division  of  the  Justice  Department  and  the  Federal 
Trade  Commission  are  charged  with  enforcing  certain  antitrust  laws. 
Theoretically,  the  Justice  Department  is  to  complain  of  accomplished 
violations  and  the  Federal  Trade  Commission  is  to  prevent  incipient 
violations . 

In  any  case,  the  FTC  filed  this  complaint  against  the  eight 
major  oil  companies,  who,  I  believe,  were  Exxon,  Mobil,  Texaco, 
Shell,  Gulf,  Amoco  (Standard  of  Indiana),  Atlantic  Richfield,  and 
Socal.  We'd  better  check  that,  as  to  whether  that  is  exactly  right, 
but  I  think  that  is  correct .**  So  another  major  FTC  proceeding  was 
under  way.   Again  this  was  obviously  something  for  the  general 
counsel  to  concern  himself  with,  and  I  did  so,  with  a  team,  of 
course.   My  number  two  man  was  George  Sears,  who  was  and  is  one  of 
our  senior  litigators  in  the  firm  and  had  done  Socal  work.   Several 
other  younger  lawyers  in  the  office  were  on  this  case  for  Socal. 

Again  we  had  squads  of  lawyers,  as  you  can  well  imagine.   Each 
of  the  eight  different  defendants  had  their  own  lawyers.   Some  had 
both  company  lawyers  and  Washington  lawyers.   Some  had  both  outside 
lawyers,  such  as  New  York  lawyers,  and  company  lawyers.   Again  the 
hearings  were  held  by  the  Federal  Trade  Commission  in  Washington. 

Hicke:    How  was  the  lead  counsel  determined? 

McBaine:   The  judge,  or  the  hearing  officer  in  this  case,  undertakes  to 

appoint  a  lead  counsel  himself,  if  the  counsel  really  don't  agree 
among  themselves.   It  sort  of  depends  on  who  is  the  most  important 
client.   In  this  case,  Exxon  was  largest  and  most  important  oil  com 
pany.   It  also  depends  on  the  lawyers  involved.   In  this  case,  we 
really  didn't  have  a  lead  counsel  at  that  time.   But  it  worked  out 
all  right. 

In  addition,  while  we  are  on  the  subject  of  counsel,  the  Fed 
eral  Trade  Commission  had  a  staff  attorney,  and  he  had  one  or  two 
assistants,  who  were  at  counsel  table.   I  think  every  time  we  had  a 
hearing  before  the  hearing  officer  in  Washington,  there  were  from 
twenty  to  thirty  FTC  staff  people  in  the  audience.   So  when  you 


FTC  v.  Exxon ,  et  aj..,  Docket  #8934  (1973)  also  known  as  Exxon 
v.  FTC.  665  F.2d  1274  (1981). 

Verified  correct. 


128 

count  the  company  lawyers  plus  the  FTC  lawyers  plus  the  FTC  staff 
people,  the  number  of  man  hours  and  woman  hours  that  were  expended 
on  this  thing  was  absolutely  staggering. 

Now  you  asked  me  about  how  the  Federal  Trade  Commission  works. 
Well,  the  Federal  Trade  Commission  has  a  staff  which  includes  engi 
neers  and  marketing  specialists,  special  economists,  and  so  forth, 
and  it  also  has  its  own  lawyers.   The  commission  itself  is  appointed 
by  the  president  and  confirmed  by  the  Senate,  and  the  staff  reports 
to  the  Federal  Trade  Commission.   So  the  staff  is  professional  civil 
service.   The  commission  is  politically  appointed  and  confirmed. 
The  staff  does  all  the  investigatory  work  and  comes  up  with  either  a 
request  of  the  commission  to  issue  a  complaint  or  a  report  to  the 
commission  as  to  why  not.   Perhaps  some  member  of  the  commission 
asked  for  such  a  report. 

Once  the  staff  has  made  its  recommendation  and  the  commission 
orders  a  complaint  issued,  the  staff  draws  it  up  and  the  commission 
authorizes  it  and  it  is  issued  and  served  on  the  defendants.   It  is 
then  assigned  to  another  branch  of  the  staff  of  the  commission, 
namely  the  hearing  officer's  branch.   In  other  words,  they  have 
their  own  judges.   These  are  civil  servants  and  they  are  usually 
people  with  some  experience  and  outstanding  abilities.   Many  of  them 
are  well  versed,  of  course,  in  a  general  subject  that  the  commission 
has  to  deal  with,  in  the  appropriate  laws,  like  those  regarding  mis 
leading  advertising  or  antitrust  law  violations.   But  in  the  last 
analysis,  the  administrative  judge,  the  hearing  officer,  is  an 
employee  of  the  commission. 


McBaine:   So  the  hearing  officer  is  at  best,  I  say,  semi-independent.   Maybe 
that's  a  little  too  harsh,  but  he  is  not  completely  beyond  the 
influence,  let's  say,  of  the  commission. 

Hicke:    Not  like  a  judge. 

McBaine:   Not  like  a  judge,  yes,  exactly.   The  litigants  who  have  to  come 

before  him  are  always  disturbed  by  this.   The  commission,  of  course, 
is  not  disturbed  by  it.   They  have  confidence  in  their  objectivity. 
But  at  any  rate,  that's  the  kind  of  position  that  you're  in.   You 
have  a  feeling  that  staff  counsel,  who  have  known  the  judge  well, 
have  got  a  leg  up  on  you. 

Well,  as  I  have  said  before,  but  it's  important  to  emphasize 
this,  the  complaint  in  this  case  simply  charged  a  violation  of  the 
antitrust  laws  without  being  specific.   The  first  thing  that  hap 
pened  was  the  Federal  Trade  Commission  wanted  to  look  at  all  the 
records  and  files  and  reports  of  each  of  the  defendant  companies. 
So  we  started  the  tremendous  process  of  investigating  all  these 
records  and  the  building  up  of  the  factual  data  of  all  these  com 
panies  . 


129 

We'd  have  a  session  before  the  judge.  All  of  the  lawyers  would 
congregate  in  Washington  and  we'd  meet  in  a  big  hearing  room,  just 
the  same  as  a  courtroom,  and  have  a  hearing.  That  would  be  maybe 
one  day,  two  days,  and  then  everybody  would  go  home  and  do  a  lot  of 
paperwork  and  come  back  for  the  next  meeting.  Well,  this  went  on 
all  the  time  until  I  retired  in  1977,  I  guess  it  was.   So  that  was 
four  or  five  years .   I  have  forgotten  the  exact  date  it  was 
started.*  The  Federal  Trade  Commission  has  power  to  issue  subpoenas 
and  require  the  production  of  documents  and  records  of  people 
against  whom  a  complaint  been  filed.   During  the  course  of  this 
time,  the  amount  of  material  that  had  to  be  produced  by  all  these 
companies  began  mounting  up  into  the  millions  of  pages.   It  was  just 
absolutely  fantastic.   It  was  perfectly  obvious  it  was  going  to  be  a 
gigantic  clerical  problem  to  produce  all  these  things,  to  keep  track 
of  them,  to  know  what  had  been  produced  and  where  they  were. 

Everybody,  I  believe  --  I  know  we  did  --  immediately  began 
looking  into  putting  all  this  data  into  a  data  bank  in  a  mainframe 
computer.   It  was  my  first  experience  with  trying  to  get  outside 
computer  help.   We  weren't  very  sophisticated;  we  weren't  sophisti 
cated  at  all.   We  didn't  have  anybody  who  had  used  a  computer  as  a 
backup  for  a  lawsuit  in  our  group. 

We  had  represented  IBM  in  some  local  litigation  out  here,  and 
IBM  had  attorneys  in  different  places  in  the  country  where  it  had 
lawsuits,  and  each  of  them  had  a  computer  in  the  office.   They  were 
hooked  up  by  telephone  wires  to  the  major  IBM  computer  someplace  in 
New  York  or  New  Jersey,  I've  forgotten  where  it  was.   Armonk  is 
where  the  headquarters  is,  and  I  think  maybe  the  computer  was  there. 
Their  basic  data  bank  was  in  New  Jersey.   I  am  not  sure.   It  doesn't 
make  any  difference.   It  is  all  done  over  a  telephone  wire.   So 
obviously  IBM  had  a  setup  that  was  priceless.   Really,  they  had  been 
accumulating  that  data  bank  for  some  time.   And  you  see,  none  of  the 
oil  companies  had  all  their  records  on  a  computer  at  that  time. 

We  spent  a  long  time  talking  to  Control  Data  people.   I  myself 
felt  that  I  barely  understood  what  they  were  talking  about.   They 
had  some  very  good  salesmen.   They  were  very  articulate  and  very 
convinced  themselves.   But  we  finally  concluded  --  at  least  I  con 
cluded,  and  I  think  my  associates  did  as  well  --  that  their  program 
or  services  that  they  wanted  to  sell  to  us,  the  proposed  procedure 
they  want  to  sell  to  us,  was  really  designed  for  a  plaintiff  in  a 
major  lawsuit  and  not  a  defendant.   That  was  because  they  had 
designed  the  whole  system  when  Control  Data  brought  a  suit  against 
IBM  a  number  of  years  before.   They  had  written  their  own  complaint 
against  IBM.   Of  course,  they  were  the  plaintiff.   They  had  assem 
bled  their  material  to  support  based  on  their  own  complaint  before 
they  even  filed  it. 


1973. 


130 

But  here  we  were  in  a  situation  as  defendants,  where  we  were 
accused  simply  of  violating  antitrust  laws.  From  the  very  outset, 
one  of  our 'objectives  was  to  find  out  how  we  had  violated  the  anti 
trust  laws,  according  to  the  Federal  Trade  Commission.   Specifi 
cally,  "What  are  your  charges?  What  did  we  do  that  was  illegal? 
Did  we  get  together  and  fix  prices?  What  did  we  do?" 

Hicke:    They  didn't  tell  you  that? 

McBaine:   They  didn't  tell  us.   And  I  spent  four  or  five  years  going  back  to 

Washington  and  going  to  these  meetings.  We  had  to  set  up  a  big  pro 
gram  in  Socal  facilities  in  Concord,  where  we  copied  documents  from 
Socal's  files  and  then  had  them  all  typed  into  a  computer  data  bank. 
Every  time  we'd  meet  with  the  administrative  law  judge,  we  would 
demand  a  specification  of  the  particulars  in  which  we  supposedly 
violated  the  antitrust  laws.   The  FTC  counsel  would  always  hem  and 
haw.   Ultimately  one  of  the  FTC  counsel  admitted  in  open  court 
there,  before  the  hearing  officer,  that  they  didn't  know  and  they 
weren't  about  to  specify.   What  they  wanted  was  a  look  at  all  the 
records  that  each  of  these  gigantic  companies  had.   After  they  had 
pawed  over  all  those  records  for  a  year  or  two,  then  they  would 
decide  whether  they  could  find  any  violations  of  law  or  not. 

Hicke:    That  sounds  medieval. 

McBaine:   Well,  I  give  you  my  word  this  is  what  happened.   And  the  transcript 
of  the  hearing  back  there  will  show  that  at  one  point,  when  I  was 
arguing  with  the  commission  counsel,  I  think  he  unwisely,  having 
been  pressed  and  pressed  and  pressed,  finally  sort  of  gave  up.   He 
said  they  hadn't  specified  and  weren't  going  to  specify  until  they 
got  all  the  records.   Of  course,  they  spent  a  year  or  two  getting 
our  records  and  looking  at  them. 

Then  we  also  had  certain  documents  that  we  wanted  to  request  of 
them.   In  other  words,  what  complaints  had  they  received  from  com 
petitors  which  led  them  to  issue  this  complaint?  What  did  the  com 
petitors  have  to  complain  about?  What  was  behind  this  lawsuit? 
Supposedly,  we  had  a  right  to  discover  what  they  had  as  well  as  they 
had  a  right  to  discover  what  we  had. 

We  asked  the  Federal  Trade  Commission  hearing  officer  repeat 
edly  to  let  us  discover  against  them  at  the  same  time  they  were  dis 
covering  against  us.   But  the  hearing  officer  would  never  permit 
that.   He  said,  "No,  no.   After  the  discovery  by  the  plaintiff,  by 
the  commission,  is  completed,  then  the  defendants  may  have  discovery 
against  the  plaintiff,  the  commission."  Well,  you  know  after  he 
spent  three  years  or  four  years  with  the  commission's  discovery 
against  the  companies,  the  likelihood  of  his  giving  us  equal  time 
against  the  commission  was  very  remote. 

So  this  went  on  for  about  five  years.   There  were  a  lot  of 
interesting  and  stimulating  incidents  and  occasions,  arguments  and 
conflicts  between  various  counsel  for  the  defendants.   Sometimes  one 


131 

would  think  it  was  wise  to  do  something  and  the  others  would  not 
think  so.   But  at  the  end  of  about  five  years,  absolutely  nothing 
had  happened. 

When  I  retired,  I  turned  it  over  to  Mr.  Sears.   He  had  been 
with  me  all  the  time,  and  he  succeeded  me  as  the  senior  counsel  for 
Chevron,  or  Socal.  Then  about  two  years  later,  I  guess,  I'm  not 
sure  just  how  long  it  was  --  I  think  after  the  Federal  Trade  Commis 
sion  had  come  down  out  of  its  ivory  tower  in  response  to  some  of 
these  public  attacks  on  it  and  the  congressional  slaps  at  it  --  they 
dismissed  the  whole  thing.   We  had  spent  eight  years  and  I  can't 
tell  you  how  many  millions  of  dollars  --  millions  and  millions  and 
millions  --  for  absolutely  nothing,  and  admittedly  on  the  basis  of  a 
complaint  that  had  no  specific  charges  as  to  how  we  violated  the 
law.   All  they  wanted  to  do  was  to  rummage  through  the  defendants' 
records,  and  you  can  imagine  what  the  records  of  a  company  like 
Exxon  consist  of.   I  think  Exxon  is  the  biggest.   It's  just  abso 
lutely  fantastic.   This  was  bureaucracy  at  its  worst,  really.   It 
wasn't  costing  them  any  money.   It  costs  all  these  American  com 
panies  money.   It  costs  their  customers  money.   The  companies  had  to 
get  that  money  from  someplace,  and  the  only  way  they  could  get  it 
was  from  the  products  they  sell. 

Hicke:    The  people  who  buy  gas  paid  for  it  and  the  people  who  pay  taxes  paid 
for  it.  Those  are  the  ones  who  paid  for  it. 

McBaine:   That's  right.   And  it  was  really  just  a  terrible  boondoggle. 

Hicke:    What  right  do  they  have  to  subpoena  all  these  documents  without  any 
charges? 

McBaine:   Well,  they  said  they  had  a  legal  right  to  do  so.   I  mean,  a  defen 
dant  could  go  and  fight  about  it  in  the  court  every  time.   But  in 
the  first  place,  it  took  several  years  to  get  them  to  admit  they 
didn't  have  any  specific  charges  in  mind,  you  see. 

Hicke:     Isn't  there  something  like  a  writ  of  habeas  corpus  that  would  apply 
to  somebody  who  doesn't  know  what  the  charges  are  against  them? 
[chuckles] 

McBaine:   The  courts  are  very  reluctant  to  hamper  administrative  agencies. 

But  it  has  to  be  pretty  bad.   In  any  case,  here  was  a  major  matter 
that  took  quite  a  few  years  and  came  to  absolutely  nothing.   I  take 
it  that  their  dismissal  was  a  tacit  admission  on  their  part  that 
they  didn't  know  of  any  violation  at  all  on  our  part.   They  had  all 
this  time  and  they  hadn't  been  able  to  discover  anything  they  really 
wanted  to  pursue  a  lawsuit  on. 

Hicke:    Did  you  ever  get  any  discovery? 
McBaine:   No.   Never  got  to  that  point. 


Hicke: 


McBaine: 


Hicke: 


McBaine: 


Hicke: 


McBaine: 


132 

Mr.  [Wallace]  Kaapcke  was  telling  me  yesterday  something  in  regard 
to  this  case,  and  I  don't  have  the  cite  that  he  read  from  now  but  it 
was,  in  effect,  memoranda  from  Senator  [Henry  "Scoop"]  Jackson  to 
Mr.  [Lewis]  Engman.*  That,  I  think,  was  actually  the  initiation  of 
this  case.   Are  you  familiar  with  that? 

Yes.   Oh,  yes.   I'm  specifically  familiar  with  that.   Of  course,  now 
there  is  a  great  deal  of  interest  in  the  various  administrative 
agencies.   The  greatest  interest  is  in  the  government  accounting 
office.   These  so-called  independent  agencies  --  nobody  quite  knows 
where  they  fit  in  the  constitutional  scheme  of  government.   You  see, 
they  aren't  really  in  either  one  of  the  three  branches:   legisla 
tive,  judicial,  and  executive.   That  was  the  trouble  with  the  Gramm- 
Rudman  Act.** 

The  money  for  these  agencies  comes  from  Congress.   There  isn't 
a  single  member  of  Congress  in  either  the  Senate  or  House  of  Repre 
sentatives  that  doesn't  know  that  the  one  who  holds  the  purse 
strings  is  the  boss.   So  when  some  Congressman  has  got  a  pet  peeve, 
and  many  of  them  do,  against  a  major  U.S.  oil  company  --  they  have 
been  whipping  boys  for  politicians  for  years  and  years  and  years  -- 
they  make  a  big  hullabaloo  and  write  a  letter  to  the  Federal  Trade 
Commission.   The  Federal  Trade  Commission  people  are  under  a  lot  of 
pressure  to  respond,  as  witness  the  fact  that  as  I  said  when  Con 
gress  got  really  mad  at  them,  it  cut  their  funds  off  entirely.   So 
it's  a  problem  that  continues  in  our  government,  and  it's  not  all 
crystal  clear. 


That's  really  interesting, 
the  problem  now? 


I  wonder  if  Congress  is  going  to  address 


Probably  not,  because  Congress  is  the  one  that  basically  controls 
these  agencies.   The  executive  doesn't. 

They  are  not  going  to  do  anything  about  this  kind  of  no-man's  land, 
where  the  regulatory  agencies  are  in  limbo? 

No,  because,  you  see,  the  other  watchdog  in  the  antitrust  laws  is 
the  Justice  Department.   Well,  the  Justice  Department  is  under  the 
control  of  the  president.   That  is  part  of  the  executive  branch.   So 
the  Congress  says,  "I'm  not  going  to  cut  out  the  Federal  Trade  Com 
mission,  because  then  if  we  write  a  letter  to  somebody  in  the 


*     Engman  was  Chairman  of  the  Federal  Trade  Commission.   The 
letter  refers  to  a  possible  conspiracy  and  requests  a  report  on  the 
relationship  between  the  structure  of  the  petroleum  and  related 
industries  and  the  shortages  of  petroleum  products.   Letter  dated 
May  31,  1973. 


**    The  Gramm-Rudman-Hollings  Act  was  passed  in  1985  to  limit  fed 
eral  budgets. 


133 

antitrust  division,  they  are  not  going  to  jump  the  way  they  do  when 
we  write  a  letter  to  somebody  in  the  FTC." 

Hicke:    Then  there  is  just  no  recourse.   One  just  has  to  bite  the  bullet. 

McBaine:   No.   But  of  all  the  litigation  that  I  ever  had  anything  to  do  with, 
that's  got  to  be  the  most  wasteful. 

Hicke:    Are  you  familiar  with  Anthony  Sampson's  book  The  Seven  Sisters?* 
McBaine:   Yes. 

Hicke:    Do  you  think  that  writing  like  that  has  something  to  do  with  what 
goes  on? 

McBaine:   Well,  it's  a  little  like  Elk  Hills  and  problems  arising  from  Elk 

Hills.   As  I  told  you,  they  really  go  back  to  the  impression  left  by 
Teapot  Dome.   Teapot  Dome  was  such  a  scandal  that  it  sort  of 
infected  anything  to  do  with  any  naval  petroleum  reserve  with  a 
cloud  of  suspicion  and  skepticism.   Senator  Jackson's  letter  that 
you  mentioned  a  few  moments  ago  goes  back  to  the  early  days  of  the 
international  oil  business.   In  the  early  days,  you  see,  none  of  the 
other  countries,  neither  the  English  nor  the  Dutch  with  the  Shell 
Oil  Company  nor  the  French,  had  any  antitrust  law.   The  United 
States  was  the  only  country  that  had  any  antitrust  laws.   These 
major  businesses  would  get  together  and  create  a  cartel  or  do  things 
of  that  kind  which  now  virtually  all  countries  forbid.   But  the 
antitrust  laws  in  Europe  are  still  fundamentally  different  than  our 
own.   Anyway,  that  sort  of  casts  the  background.   It  seems  you  are 
dealing  with  a  bunch  of  sinners,  you  see.   The  question  is:   have 
they  reformed  in  the  last  seventy-five  years? 

Hicke:    Guilty  until  proven  innocent. 

McBaine:   Yes.   So  psychologically,  a  lot  of  people  have  that  attitude.   For 
example,  I  have  a  partner  who  came  out  here.   He  joined  us,  and  he 
was  sort  of  a  [Robert]  La  Follette  liberal,  in  that  school.   He 
somehow  or  other  got  assigned  to  do  some  Socal  work.   I  don't  know 
what  his  attitude  was,  but  I  suspect  that  he  was  not  pleased  with 
that,  but  as  I  say,  a  La  Follette  liberal. 

Then  he  went  up  to  Sacramento  for  us  as  a  young  lawyer  to 
assist  our  lobbyist.   At  that  time  we  had  a  partner  from  this  firm 
who  went  to  Sacramento  each  year  during  the  session  of  the  legisla 
ture  to  act  as  a  lobbyist  for  Socal,  and  at  that  time,  maybe  one  or 
two  others,  as  well.   Anyway,  this  young  man  came  back  from 
Sacramento  and  he  said  to  me,  "My  God,  my  eyes  have  been  opened." 


*     Anthony  Sampson,  The  Seven  Sisters  (New  York:   Viking  Press, 
1975).   The  author  strongly  believes  in  controlling  the  major  oil 
companies . 


134 

He  said,  "I  have  a  completely  different  point  of  view  on  things.   I 
have  seen  so  many  petty,  would-be  crooks  in  Sacramento,  and  the 
Standard  Oil  Company  of  California  is  like  a  Knight  of  the  Round 
Table  compared  to  all  these  hustlers  I  have  seen  in  Sacramento.   I 
have  changed  my  mind  completely."   [laughter] 

I  think  that  The  Seven  Sisters,  to  go  back  to  that,  is  sort  of 
popular  with  the  kind  that  foresee  all  sorts  of  clandestine  meetings 
and  agreements  that  don't  exist,  as  far  as  I  am  concerned.   My  expe 
rience  of  the  oil  industry  is  that  certainly  the  American  companies 
are  very  much  aware  of  antitrust  problems.   And  I  think  their  record 
is  pretty  good,  as  compared  to  a  lot  of  other  industries.  There 
have  been  very  few  things  that  have  been  proven  against  them. 

Hicke:    Well,  we  have  been  talking  about  ethics  for  Standard  Oil,  which 

reminds  me  of  a  question  that  I  wanted  to  ask  you  at  some  point  --  I 
might  as  well  throw  it  in  now  --  regarding  ethics  for  lawyers  and 
law  firms.   I  think  that  certainly  PM&S  has  very  high  standards,  and 
most  law  firms  probably  do.   How  does  this  come  about  and  how  is  it 
continued? 

McBaine:   Well,  ethics,  in  the  broadest  possible  sense,  comes  from  your  child 
hood,  I  guess.   You  don't  lie  and  you  don't  cheat.   But  other  than 
that,  lawyers  supposedly  have  canons  of  ethics.   I  think  we  made  a 
great  mistake  in  that  a  number  of  years  ago.   It  used  to  be,  when  I 
was  young,  that  the  American  Bar  Association  had  canons  of  ethics. 
They  were  sort  of  the  equivalent  of  the  ten  commandments.  They  were 
very  broad,  very  brief. 

I  think  one  of  the  characteristics  of  American  life,  possibly 
led  by  the  lawyers,  but  certainly  participated  in  by  everybody,  is 
to  tinker  with  everything  in  an  endless  search  for  perfection. 
Somehow  or  another,  it  seems  to  me,  most  of  the  American  people 
think  that  if  they  only  try  hard,  they  can  make  things  be  perfect. 
Well,  I  don't  believe  that.   I  think  that  that  leads  one  to  a  point 
where  common  sense  really  begins  to  disappear. 

The  American  Bar  Association,  a  number  of  years  ago,  maybe  fif 
teen  or  twenty  years  ago,  decided  that  they  would  spell  out  this 
whole  thing.   Arguments  might  come  up  under  the  so-called  ten  com 
mandments  I  referred  to.   So  they  did  what  Napoleon  did  when  he 
tried  to  formulate  a  code  setting  forth  all  the  laws,  in  contrast  to 
the  common  law  in  England,  which  as  you  know  is  simply  precedent 
based  on  the  usage  of  the  people.   Napoleon  said,  "Here  we  will  sit 
down,  and  we  will  write  out  the  whole  law  of  the  country."  He  had 
the  Code  Napoleon  compiled.   Well,  others  had  tried  it  before,  such 
as  Hammurabi  and  Justinian. 

The  American  Bar  decided  that  they  would  do  this.   So  they  sat 
down  and  they  wrote,  oh  a  great,  big  code  --  I  don't  know  how  many 
pages  it  is  --  with  fine  print  and  point  one,  subdivision  A,  subdi 
vision  A.I,  subdivision  this,  that,  and  the  other  thing  until  you 
get  down  to  about  the  sixth  or  seventh  subdivision.   Psychologi- 


135 

cally,  it  seems  to  me  that  that's  just  an  invitation  to  somebody  who 
may  not  have  the  broad  general  standards  right  to  go  combing  through 
that  and  see  if  he  can  find  something  that  hasn't  been  forbidden.  I 
think  it  encourages  that  sort  of  an  approach  to  things  . 

I  think  it's  a  basic  mistake.   Most  people,  when  they  meet 
something  in  life,  know  what's  right  and  what's  wrong.   And  if  they 
fudge  on  something  or  pull  something  that  is  too  fast,  if  they  trick 
somebody,  they  know  it's  wrong.   You  don't  have  to  have  a  twenty- 
five  page  booklet  with  fine  print  to  tell  you  it's  wrong. 

Now  we  have  a  bar  examination  in  legal  ethics.   I  don't  know  if 
you  know  this.   But  in  addition  to  the  general  examination  on  the 
law,  contracts  and  tort  and  antitrust  law,  and  this,  that  and  the 
other  thing,  there  is  a  separate  bar  examination  on  legal  ethics. 
As  I  say,  I  rather  question  what  good  that  does.   Now  the  English 
don't  have  any  such  examination,  but  in  their  legal  education,  they 
start  out  with  Roman  law.   At  least  when  I  was  at  Oxford,  I  had  to 
do  two  papers  on  it  in  my  final  examination,  which  were  in  Latin. 
One  paper  was  on  the  Roman  law  of  sales  and  one  was  on  the  Roman  law 
generally. 

I  came  to  a  conclusion  about  the  purpose  of  this  and  their 
courses  in  jurisprudence,  which  discuss  the  different  systems  of  law 
that  different  civilizations  have  had.   The  point  was  that  the  grad 
uate  of  that  comes  out,  whether  he  consciously  realizes  it  or  not, 
with  an  inherent  knowledge  that  he  is  a  successor  to  a  long  tradi 
tion  of  people  that  have  made  various  civilizations  workable. 
Therefore,  as  I  say,  when  you  get  up  all  this  complicated  code  about 
you  can  do  this,  but  you  can't  do  that,  it  seems  to  me  sort  of  the 
opposite  way  to  approach  it. 


Frankly,  I  can't  remember  a  single  ethical  problem  that  ever  came  to 
my  attention  in  the  firm  during  my  thirty-odd  years,  or  whatever  it 
is,  here. 

Hicke:    That's  a  very  unusual  and  wonderful  record.   Well,  I  don't  know  if 
it  is  unusual,  but  it  seems  unusual  to  me,  and  I  just  wonder  how 
that  can  come  about.   Let's  say  it's  unusual  for  a  firm  to  be  this 
old  with  this  many  lawyers  and  not  ever  have  a  problem.   Just  by 
sheer  weight  of  numbers. 

McBaine:   That's  true.   I  can  remember  a  very  interesting  case  I  had.   It 

involved  an  oil  field  down  in  Louisiana  of  which  Standard  was  the 
owner  or  the  oil  and  gas  leasee.   Some  question  of,  again,  Louisiana 
law  came  up.   I  believe  we  won  it  in  the  trial  court  and  in  the 
appellate  court.   During  the  appeal,  the  opponents  retained  a  prof 
essor  of  either  Louisiana  law,  because  it  was  a  point  of  Louisiana 
land  law,  or  of  Louisiana  oil  and  gas  law.   Anyway,  they  retained 
him  as  an  expert  witness  to  give  an  opinion  on  a  particular  point  of 
Louisiana  law  that  was  crucial  to  the  case. 


136 

By  happenstance,  purely  by  happenstance,  I  learned  that  the 
professor  had  been  promised  a  contingent  interest  in  the  oil  and  gas 
lease  if  our  opponents  won  the  case.   I've  forgotten  exactly  how  I 
did  it,  but  I  filed  some  papers  with  the  court  and  set  forth  these 
facts  to  the  best  of  my  knowledge  and  belief  and  asked  the  court  to 
require  the  professor  to  divulge  his  interest  in  the  lease  on  the 
grounds  that  this  disqualified  him  as  a  so-called  expert  witness. 
Because  otherwise,  let's  say  a  man  shows  up  as  an  expert  --  say  he 
was  a  professor  of  law  --  and  he  shows  up  as  a  professor  of  law  and 
you  find  out  that  the  man  has  a  chance  to  become  a  millionaire  if 
the  case  goes  his  way.   It  seemed  to  me  that  we  were  entitled  to 
have  the  court  know  that.   Well,  of  course  the  court  did  know  that, 
or  knew  the  possibility  of  that  from  the  fact  that  I  filed  these 
papers . 

He  refused  to  answer,  and  I  demanded  that  he  answer  and  he 
wouldn't  do  it.   He  kept  ducking  it.   It  is  my  recollection  that  I 
don't  think  I  ever  got  him  to  admit  or  deny  it.   But  the  court 
decided  the  case  in  our  favor  anyway. 

Hicke:    Did  he  give  an  opinion? 

McBaine:  I  don't  think  so.  I  am  not  sure.  I  don't  remember  whether  the 
court  refused  to  hear  his  opinion  or  they  just  decided  the  case 
before  our  quarrel  was  settled. 

Hicke:     In  any  case,  you  put  him  off? 

McBaine:   Yes.   But  that  was  sheer  happenstance.   Well,  to  me,  that  was  a 

question  of  ethics.   He  wasn't  acting  as  a  lawyer,  but  that  was  a 
question  of  ethics.   It  just  seems  to  me  a  question  of  common  sense. 
Now,  if  you  paid  the  man  as  an  expert  a  reasonable  fee  of  $1,000  for 
his  opinion  --  win,  lose,  or  draw  --  there  is  nothing  wrong  with 
that.   But  to  give  him  an  interest  in  an  oil  field  contingent  on  his 
side  winning  is  certainly  unethical,  from  my  point  of  view.   It's 
unethical  for  the  lawyer  as  well  as  the  law  professor  to  do  that. 

Hicke:    Right.   It's  not  only  the  professor  who  is  at  fault. 

Well,  there  is  all  of  this  insider  trading  scandal  now  on  Wall 
Street. 

McBaine:   Oh,  well,  that's  not  only  unethical,  it's  illegal. 

Hicke:    Well,  that's  true.   But  it  brings  to  my  mind  the  whole  question  of 
how  a  sense  of  ethics  is  acquired.   You  said  it's  learned  in  child 
hood,  and  that's  true,  but  is  it  also  taught  in  schools? 

McBaine:   It  was  in  my  day.   But  my  impression  is  that  it  is  not  now. 

Hicke:    And  apparently  the  Roman  law  and  the  weight  of  centuries  is  not 

taught  either,  giving  a  long  perspective  on  the  law  as  an  honorable 
profession. 


137 
McBaine:   No,  I  don't  think  so. 

Hicke:    So  do  you  expect  that  there  are  going  to  be  more  and  more  problems 
like  this? 

McBaine:   I  don't  really  know.   So  far  as  I  know,  there  are  prominent  lawyers 
in  every  city  that  don't  meet  the  same  standards  that  I  have  in 
mind.   There  are  biographies  about  a  lot  of  them,  most  of  them 
criminal  lawyers. 

There  was  a  man  named  Rogers  who  was  an  outstanding  criminal 
lawyer.  His  daughter  was  Adela  St.  John  Rogers.   I  think  she  wrote 
a  biography  on  him,  I  am  not  sure.   I  remember  that  he  was  very 
proud  of  his  reputation  because  he  said  he  had  never  bribed  a  juror. 
And  then  the  book  tells  some  of  the  tricks  that  he  had  used  in 
planting  false  evidence:   you  know,  at  the  scene  of  a  murder,  taking 
out  a  gun  and  throwing  it  in  the  corner  and  confusing  everybody  and 
that  kind  of  stuff. 

Hicke:     But  he  stopped  short  of  bribery? 

McBaine:  Yes.  He  was  very  proud  he  had  never  bribed  a  juror.  [laughter] 
Well,  as  I  say,  you  raised  a  question  that  simply  has  not  been  a 
part  of  my  experience  at  Pillsbury,  Madison  &  Sutro. 

Hicke:    That  says  a  lot  for  the  firm.   I  guess  there  just  isn't  any  complete 
explanation  for  it.   Do  you  think  the  leadership  of  the  firm,  for 
instance,  has  something  to  do  with  it?   Is  it  stressed  anywhere?   Is 
it  taken  for  granted? 

McBaine:   Well,  I  am  ten  years  out  of  date  on  that. 

Hicke:    Okay.   I  am  really  asking  you  about  the  time  when  you  were  active. 

McBaine:   Well,  I  am  not  quite  sure  that  this  is  true,  but  I  would  like  to 

think  that  if  a  question  had  come  up  by  one  of  the  younger  lawyers, 
or  even  an  old  lawyer,  where  he  was  considering  doing  something 
which  would  have  been  advantageous  and  he  thought  maybe  it  was  a 
little  tricky  or  unethical,  he  would  have  discussed  it  with  somebody 
else,  somebody  directly  interested  in  the  matter  at  hand.   If  the 
original  person  had  any  ideas,  he  probably  would  have  dropped  them. 
But  I  don't  know  that  that  ever  happened.   I  don't  know  that  anybody 
ever  discussed  that  with  me. 

As  far  as  I  know,  in  the  years  I  have  been  at  the  firm,  there 
has  never  been  a  reprimand  by  any  court  to  anybody  in  the  firm.   And 
that  often  happens.   Somebody  gets  carried  away.   They  may  not  be 
really  crooked  or  anything  of  the  kind,  but  they  get  excessively 
zealous.   Many  lawyers  do.   I  don't  know  of  any  instances  of  that 
kind  here. 

Hicke:    That's  really  impressive. 


McBaine: 


Hicke: 

McBaine: 
Hicke: 


138 

Well,  I  don't  know.  Maybe  I  am  just  not  savvy  enough  or  something. 
It  has  been  ten  years  I  have  been  out,  but  I  don't  think  that  has 
changed.   And  there  have  been  some  very  distinguished  law  firms  that 
have  gotten  in  trouble  sometimes.   But  it's  an  honest  difference  of 
opinion.   I  don't  think  any  of  them  have  been  out-and-out  crooks. 
Sometimes  they  do  something  in  advocacy  that  the  judge's  courts 
object  to,  really.   I  don't  know  of  any  incident  like  that.   I  am 
not  ducking,  I  just  don't  know  anything  about  it.   I  think  our  atti 
tude  is  pretty  well  defined.   I  don't  think  the  problems  are  too 
damned  difficult. 

So  it's  pretty  clear  to  a  person  when  he  is  getting  close  to  the 
line.   He  wouldn't  have  much  question. 


I  think  so. 

That  makes  it  easy, 
the  trouble  occurs. 


It's  when  you  get  into  those  gray  areas  that 


McBaine:   That's  right. 


General  Counsel  Socal 


Hicke:    I  want  to  hear  a  little  bit  more  about  your  work  as  general  counsel 
and  then  I  want  to  get  into  your  time  as  senior  partner. 

McBaine:   I  think  I  was  general  counsel  one  year  before  I  became  senior 
partner .* 

Hicke:    Until  your  tenure  ended,  it  was  normally  the  case,  was  it  not,  that 
the  two  went  together? 

McBaine:   No.   Because  my  predecessor  as  general  counsel  was  Mr.  Kirkham, 
while  Mr.  Sutro  was  senior  partner. 

Hicke:    That's  true. 

McBaine:   But  before  that  time,  one  man  had  generally  had  the  same  job.   Now, 

of  course,  one  man  does  not  have  the  two  jobs.   And  they  didn  t 

before:   Mr.  [Frank]  Roberts  was  general  counsel,  but  he  was  not 
senior  partner.*"' 


*     McBaine  became  general  counsel  for  Socal  in  January  1970.   He 
became  senior  partner  in  1971.   See  following  page. 

**    Frank  Roberts  became  Chevron  general  counsel  in  1977. 


TURNER  H.  MORAINE 


TURNER  H.  McBADOka  senior 
partner  in  the  firm  of  PJUsbury, 

Madison  and.  Sutro, 'has  been .  ap 
point  ed  .General  Counsel  to,  Stan- 
dard  OQ  .Company  of .  California,  j 
succeeding  Francis  R.  Kirkham  of 
ihe  same  firmr' ' ; 'f ', - :" > '". '.' ::- '*' 

Bora     in     Columbia,  -  Missouri, 
McBaine  -was  graduated  from  .the 
University- of  -California  at-Berk- 
eley  in  1932,  received  a  Rhodes! 
Scholarship  for  -study  ~f&:, Oxford  | 
University  to 


received  a  BA.  in 'Jurisprudence 
In  1934,  and  received  an  LL.B.  de 
gree  from  the  University  of  Cali 
fornia  School  of^Uw,in:  1936.  He 
has  been  a  .partner  in  his  firm 
since  1950L  -  :  .-  '•': 

McBa tne ..  was'  tin  active  duty 
with  the  United  States  Navy  from 
1941  to  1943,  serving  the  entire 
time  with r  the  Office  of  Strategic 
I  Services,  both  to  Washington, 
i  D.C.,  and  to  the  Middle  East  and 
China-Burma-India  Theaters.  He 
attained  the  rank  of  Commander, 
U.S.N.R.,  and  was  decorated  by 
both  the  "Unlted^States  and  Brit 
ish  governments,  receiving  the 
Legion  of  Merit  and  Order  of  the 
British  Bnplre..'  :  "  V;  V'  .' 

Active  to  civic  affairs,  McBalne 

has  served  as  a  director   of  the 

San    Francisco    Bar    Association, 

.  ajx}  is  currently  Chairman  of  the 

^tsttcfition's  JdfllfAN  Cfi(AtAtae« 


139 


Hicke: 


McBaine: 


Also  true  of  Mr.  Kaapcke. 
counsel .* 


He  was  senior  partner  but  not  general 


Hicke: 
McBaine: 


Hicke: 
McBaine; 


Right.   I  can't  really  say  why  that  was  so.   I  suppose  the  facts  are 
probably  different  in  each  case.   I  just  don't  know  enough  about  it 
now  to  know  whether  the  job  has  gotten  to  be  more  than  one  man 
should  reasonably  bear  or  not. 

I  should  think  that  it  always  had  been. 

Well,  I  didn't  really  find  it  so.   But  that  depends  on  how  good  a 
staff  you've  got.   The  responsibility  of  the  general  counsel  of  the 
company  is  to  see  to  it  that  there  are  competent  people  in  the  firm 
expert  in  the  types  of  things  in  which  Chevron  engages  and  the  kinds 
of  problems  they  have,  to  see  that  somebody  is  available  to  cover. 
Now  during  my  time  with  the  firm,  we  have  always  had  sufficient 
people,  sufficient  manpower  and  womanpower,  to  make  sure  that  s 
true . 

Sometimes,  very  rarely,  the  client  may  come  to  the  general 
counsel  and  say  that  a  new  man  has  been  put  in  charge  of  the  work 
for  some  department  of  the  company,  and  maybe  the  former  man  in 
charge  of  this  department  was  perfectly  satisfied  to  have  lawyer  A 
do  his  work,  but  the  new  man  doesn't  like  him.   Or  he  would  go  to 
the  vice  president  for  legal  affairs  for  the  company  and  say,  "I 
would  like  to  have  a  change."  In  that  case,  it  is  up  to  the  general 
counsel  to  make  whatever  rearrangements  are  necessary.   It  doesn't 
mean  that  the  general  counsel  isn't  also  in  a  sense  the  personal 
counsel,  if  you  will,  to  the  chairman  and  chief  executive  officer. 
Now  Chevron  has  got  a  vice  chairman.   In  my  day  there  were  only 
really  two  officers  in  charge:   the  chairman  and  the  president. 

Who  were  they? 

Well,  Mr.  Follis  was  CEO  when  I  was  made  general  counsel,  and  then 
Otto  Miller  and  then  H.  J.  Haynes .   I  believe  I  worked  with  all 
three  of  them.   My  tenure  with  Mr.  Miller  was  the  longest  of  those 
three. 

I  considered  I  had  to  be  available  for  whoever  was  the  chairman 
and  CEO.   If  he  wanted  additional  help,  I  would  tell  him  who  was 
assigned  to  it.   I  didn't  always  do  all  the  work  or  be  directly 
involved  in  it.   But  I  had  to  make  sure  that  the  firm  had  somebody 
to  cover  every  possible  situation  and  did  so  adequately.   How  much  I 
was  involved  depended  on  the  people  I  was  working  with. 

When  I  worked  with  Mr.  Madison,  he  was,  as  I  have  told  you 
before,  a  superb  delegator  of  powers.   When  you're  working  for 
someone  like  that,  if  you  know  you've  got  the  answers  to  your 


Kaapcke  was  senior  partner  1977-1980 


Hicke: 
McBaine: 


140 

client's  problem  and  you're  confident  that  your  answer  is  right,  you 
tell  the  client  so  and  send  Mr.  Madison  a  copy.   If  it's  a  tricky 
business  and  if  there  is  any  kind  of  thing  about  it  that  requires 
some  explanation,  then  you  have  to  ask  to  see  him,  and  you  tell  him 
what  you  are  proposing  to  do.  Well,  that's  exactly  what  I  had  to 
do. 

Most  of  our  people  I  had  been  working  with  for  quite  a  few 
years,  you  see.   And  I  had  confidence  in  them  or  I  wouldn't  still  be 
working  with  them.   If  I  assigned  one  of  them  a  problem,  unless  it 
was  a  direct  problem  for  the  chairman  or  CEO,  they  would  do  the  job. 
They  would  give  a  memorandum  or  an  answer,  and  if  it  was  an  oral 
answer,  they  would  have  to  reduce  it  to  writing  and  send  a  copy  to 
me.   They  also,  under  the  practice  in  those  days,  had  to  send  a  copy 
to  the  vice  president  for  legal  affairs  of  the  company.   They  had  to 
send  me  a  copy  as  general  counsel.   So  I  might  pick  up  something 
that  I  didn't  agree  with,  in  which  case  I  might  overrule  it.   But 
basically  if  there  was  any  question  about  it,  usually  the  man  or  the 
woman  would  come  and  see  me.  We  didn't  have  any  women  on  the  Stan 
dard  account  at  that  time,  I  think,  not  any  that  I  was  concerned 
with.   But  anyway,  it's  a  matter  of  delegation  and  supervision, 
really.   If  you  do  it  right,  it  isn't  all  that  time-consuming. 

These  special  cases  that  I  talked  about  were  cases  where  I  felt 
I  myself  wanted  to  get  personally  involved.   It  wasn't  always 
because  I  didn't  think  anybody  else  in  the  firm  could  do  it;  it  was 
sometimes  that  I  thought  it  was  a  matter  of  such  interest  to  the 
officers  of  the  client  that  they  would  expect  me  to  do  it.   It  was  a 
combination  of  things  like  that.   The  example  of  this  was  when  I  was 
assigned  to  the  Iranian  consortium  business,  I  was  gone  for  nine 
months.  Well,  I  have  no  idea  how  many  communications  I  sent  to 
Mr.  Madison  during  that  period,  but  I  sure  didn't  send  him  one  every 
day.   [chuckle] 

You  only  sent  him  a  communication  when  something  special  came  up? 

Yes.   That's  right.   Or  if  I  got  a  request  from  him,  which  I  don't 
ever  remember  getting.   So  it's  not  an  overwhelming  job.   You'd  have 
to  see  the  papers  that  come  in  every  day  from  Standard  to  see  what 
it  involves.   I  don't  know  if  anybody  has  told  you,  but  the  way  it 
worked  is  that  Standard's  land  department  worked  from  a  lot  of  pre 
pared  forms  approved  by  Pillsbury,  Madison  &  Sutro:   leases  and  that 
sort  of  thing.   If  something  came  up  where  they  didn't  have  a  form 
that  had  been  approved,  then  they  had  to  come  to  some  lawyer  in 
Pillsbury,  Madison  &  Sutro  and  get  it  approved.   The  ultimate 
responsibility  at  all  times  rests  with  PM&S,  and  so  far  as  Standard 
was  concerned,  in  essence  that  rested  with  me.   Because  if  anything 
went  wrong  and  the  chief  executive  officer  learns  about  it,  he  was 
going  to  call  me. 


Hicke:    So  did  you  have  to  read  everything? 


141 

McBaine:  No.   I  didn't  try  to.  But  I  read  enough.   I  remember  one  incident. 
I  don't  mean  to  sound  immodest  on  this,  but  you  just  asked  me  how 
the  thing  worked.   One  of  the  younger  lawyers  was  assigned  a  problem 
about  which  I  was  not  an  expert  at  all.  He  did  prepare  an  opinion 
and  did  send  it  to  me  before  he  sent  it  down.   I  suppose  I  may  have 
asked  him  to  do  so  particularly.   I  read  it  and  I  wasn't  happy  with 
it.   So  I  made  some  comments,  called  him,  and  made  some  comment  to 
him.  He  went  back  and  wrote  another  one.   I  think  I  saw  that  about 
three  times  and  I  still  wasn't  happy  with  it. 

So  finally  I  just  sat  down  and  started  right  at  the  very  begin 
ning  and  went  over  it  with  him  step  by  step  by  step.   There  was  a 
particular  statute  that  he  cited  in  the  course  of  his  reasoning  that 
led  to  this  conclusion.   The  result  that  he  had  reached  was,  I 
thought,  just  impermissible.   I  mean,  it  was  so  restrictive.   It  was 
just  unreasonable.   I  couldn't  believe  that  that  was  the  law.   He 
cited  the  statute  and  everything.   I  said  I  would  like  to  see  that. 
"Well,"  he  said,  "I  know  what  the  statute  provides.   I  work  with 
that  statute  all  the  time."  I  said,  "I  don't  care.   I  want  to  see 
the  statute.   So  get  whatever  statute  you're  talking  about  here  and 
let's  read  it." 

When  he  put  it  in  front  of  me,  I  could  see  it  was  a  question  of 
his  being  too  close  to  it.  He  had  read  this  thing  --  in  a  different 
context  --  many  times  and  he  thought  he  knew  it  cold.  When  we 
looked  at  the  statute  in  the  context  of  this  particular  problem  that 
we  had,  it  didn't  say  what  he  thought  it  said  at  all,  which  was  just 
lucky. 

The  reason  I  refused  to  accept  it  was  not  that  he  didn't  know 
anything  about  the  law,  but  that  the  answer  that  he  gave  was  an 
answer  that  would  have  infuriated  the  client.   It  was  just  so 
restrictive  and  unreasonable  that  the  executive  in  the  company  who 
got  it  would  unquestionably  complain  to  his  superior  about  what 
those  damned  lawyers  were  doing  to  them,  and  so  on. 

Hicke:    You  would  have  gotten  it  in  the  end  anyway  [laughter]. 

McBaine:   I  was  going  to  make  sure  that  if  it  had  to  go  that  way,  I  was  pre 
pared  to  answer  why.   [laughter] 

Hicke:    So  you  were  alert  for  things  like  that  rather  than  trying  to  actu 
ally  monitor  every  single  thing  that  happened? 

McBaine:   Yes,  that's  right.   What  really  started  me  there  was  the  fact  that  I 
felt  that  this  client  would  be  appalled  at  this  answer.   It  didn't 
make  common  sense.   But  it  took  me  the  longest  time  to  ferret  out 
where  the  flaw  in  the  opinion  was.   It  was  a  complicated  chain  of 
reasoning. 

Hicke:    Just  as  a  digression  here:   you  have  used  the  words  "common  sense" 

several  times,  maybe  three  or  four  this  afternoon,  and  I'm  gathering 
that  you  find  a  connection  between  the  practice  of  law  and  good 
common  sense. 


142 

McBaine:  Well,  I  certainly  do.   I  certainly  do.   I  regret  to  say  it,  but  I 

think  a  lot  of  our  legislation  these  days  violates  common  sense.   It 
is  partly  because  of  all  these  special  interest  groups  who  have  such 
an  intense  interest  in  something  that  they  tend  to  take  a  point  of 
view  which  satisfies  their  particular  narrow  interest.   But  it  has 
lost  common  sense.   I  think  that's  a  failing  in  our  present  national 
system.  This,  plus  several  things. 

One,  this  proliferation  of  rights,  as  I  mentioned  to  you  the 
other  day.   Everybody  has  rights.  Animals  have  rights.   Birds  have 
rights.   Everybody  has  rights.   And  then  secondly,  the  absolutely 
unquenchable  tendency  to  tinker  with  everything  and  want  to  perfect 
it,  until  you  carry  it  out  with  one  little  narrow  objective  in  mind, 
which  you  have  perfected  down  to  the  nth  degree,  but  you  have  for 
gotten  that  in  the  general  context  of  life  as  a  whole  it's  nonsense. 
I  think  we  have  far  too  much  of  that  in  this  country.   I  really  do. 
I  think  a  lot  of  lawyers  are  responsible  for  it,  lawyers  as 
legislators . 


143 


V  SENIOR  PARTNER  OF  PM&S,  1971-1976:   FIRM  ADMINISTRATION 


Growth  of  Committee  System 


Hicke:    At  the  same  time  you  were  general  counsel,  you  were  working  on  these 
cases  --  for  instance,  I  think  you  were  handling  the  Henry  Miller 
estate.  That  was  in  the  '70s  too,  wasn't  it? 

McBaine:   Yes. 

Hicke:    So  you  had  the  three  major  cases  you've  talked  about  today,  and  you 
were  also  the  senior  partner  at  PM&S. 

McBaine:   Well,  yes.   The  F-310  case  and  the  FTC  v.  The  Big  Eight  were  both 
Standard  cases,  of  course.   But  I  think  that  every  general  counsel 
has  done  that.   I  am  sure  Mr.  Kirkham  will  tell  you  that  he  spent  an 
appreciable  percentage  of  his  time  on  non-Chevron  matters.   When  you 
accept  this  job  as  general  counsel,  you  are  not  required  to  pledge 
that  you  will  give  your  total  time.   I  mean,  the  CEO  of  Standard 
puts  that  up  to  you,  to  your  common  sense. 

Hicke:    You  just  have  to  see  that  the  work  does  get  done. 

McBaine:   Yes.   You  have  to  see  that  you  are  available  to  him  whenever  he 

wants  you,  too,  or  have  some  damned  good  reason  why  not.   I  never 
had  any  trouble  along  that  line. 

Now,  you  are  asking  me  about  the  management  of  the  firm,  too. 
We  were  not,  of  course,  the  size  we  are  now.   For  some  time  we  had 
divided  up  the  work  into  a  committee  system.   That  just  came  about 
as  we  grew.   In  other  words,  as  we  grew,  we  had  more  people  who  came 
and  asked  for  jobs  as  summer  clerks.   As  the  problem  of  employing 
people  increased,  we  formed  an  employment  committee.   It  was  the 
same  with  the  library.  When  I  was  a  young  partner  in  the  firm,  we 
had  no  librarian.   Office  boys  just  went  in  and  put  the  books  on  the 
shelves  as  they  arrived. 

f* 


144 

McBaine:   Somebody  put  all  the  advance  sheets  and  all  the  loose  leaf  services, 
like  the  tax  services  or  labor  relations  law  and  that  sort  of  spe 
cialized  things  that  lawyers  in  that  field  had  to  keep  up  with, 
somebody  put  all  those  things  on  the  floor  behind  a  desk  in  the 
library.   Someone  found  about  three  or  four  months'  supplies  of  them 
which  hadn't  been  opened,  much  less  filed  in  the  loose-leaf  services 
in  which  they  were  supposed  to  go.   I  guess  a  secretary  was  supposed 
to  come  in  there  and  do  that  occasionally.   She  hadn't  done  it  for 
about  four  months.  That  sort  of  broke  the  logjam  on  having  a  secre 
tary  do  that  work.  We  had  to  have  a  library  committee  appointed  to 
find  a  librarian.   So  we  created  a  library  committee.   As  I  say, 
these  things  sort  of  grew  haphazardly.   Then  we  had  an  insurance 
committee  when  it  became  apparent  that  we  had  to  have  libility 
insurance  and  various  other  kinds  of  insurance. 

Hicke:    Up  until  the  '70s  you  didn't  have  any  insurance? 

McBaine:   Oh,  yes.   But  we  didn't  have  any  malpractice  insurance,  no. 

Hicke:    Yes,  but  you  had  other  insurance? 

McBaine:   I  don't  know  when  we  first  had  it.  We  had  regular  liability  insur 
ance,  but  no  malpractice  insurance. 


The  Management  Committee 


McBaine: 


Then  there  was  the  perennial  question  of  who  does  one  take  in  as 
partners?  How  many  do  you  take  in  and  who  are  going  to  be  selected 
as  partners?  Well,  I  felt  that  --  and  this  is  the  way  I  was  brought 
up,  and  my  attitudes  were  formed  by  a  lifetime  of  experience  --  I 
felt  that  the  lawyers  that  had  been  here  the  longest  and  had  risen 
in  the  firm,  showed  their  competence  as  lawyers  and  also,  along  with 
that,  showed  their  ability  to  work  with  other  people,  were  obviously 
the  best  members  to  have  on  the  management  committee.   You  might 
have  somebody  who  is  absolutely  impossible  to  live  with  or  deal  with 
individually  who  is  such  a  brilliant  lawyer  you  couldn't  keep  him 
out.   But  we  didn't  have  any  such  people  as  that. 

My  basic  philosophy  was  that  even  Mr.  Madison  had  had  a  work 
able  committee  of  the  four  senior  partners.   It  wasn't  formal,  but 
Mr.  Madison  and  Mr.  Prince,  Mr.  Bennett  and  Mr.  Sutro  were  the  four 
senior  people.  They  were  sort  of  an  ad  hoc  committee.   Mr.  Sutro 
also  had  a  committee,  but  I  don't  remember  who  was  on  it.   He  can 
better  speak  for  himself.   Anyway,  my  theory  was  that,  as  I  say,  the 
older  partners,  who  had  risen  to  the  top  of  the  firm,  had  the  expe 
rience,  the  proven  ability,  should  make  up  the  management  committee. 
The  idea  apparently  held  now  of  having  a  cross-section  of  different 
ages,  which  we  do  much  more  than  we  did  in  my  day,  was  not  prevalent 
in  the  firm  during  my  time.   Nor  was  it  held  by  me,  nor  am  I  con 
vinced  today  that  that's  necessarily  a  wiser  way  to  do  it. 


145 

So  we  did  go  to  a  management  committee  system.   Some  of  the 
senior  partners  were  not  on  the  management  committee  because  they 
really  had  no  interest  in  it.   They  didn't  want  to  be  on  the  manage 
ment  committee.   But  as  far  as  I  was  concerned,  I  thought  they  had  a 
right  to  be  if  they  wanted  to  be. 

Our  management  committee  was  drawn  from  the  seniors  in  the 
firm.  We  didn't  so  much  attempt  to  have  all  ages  represented.  We 
didn't  really,  at  that  time,  attempt  to  have  the  different  practice 
groups  represented.   I  have  forgotten  exactly  how  many  there  were  on 
the  committee  --  maybe  eight  or  ten  --so  you'd  almost  automatically 
have  the  representatives  of  the  various  groups  anyway.   I  also  had  a 
practice  which  Mr.  Kaapcke  discontinued  but  which  I  still  think 
would  have  been  wise  to  continue:   I  made  the  last  succeeding  senior 
partner  an  ex  officio  member  of  the  management  committee. 

Hicke:    That  would  have  been  Mr.  Sutro. 

McBaine:   Yes.   I  thought  that  gave  a  continuity  which  was  useful.   Why 

Mr.  Kaapcke  discontinued  it,  I  don't  know.   It's  never  been  reinsti- 
tuted.   The  committee  is  made  up  differently  nowadays.   There  was 
only  one  senior  partner  when  I  was  a  senior  partner  --  that's  what 
we  called  it  then,  not  chairman  or  any  other  title.   One  of  the  jobs 
as  the  senior  partner  was  to  canvass  all  the  members  of  the  partners 
in  the  firm  as  to  (a)  who  should  become  new  partners  in  the  firm, 
and  (b)  who  among  the  partners  deserved  advancement  and,  theoreti 
cally,  demotion.   I  can't  really  recall  any  demotions  other  than  for 
health  reasons. 

Hicke:    This  would  be  financial  demotions  you  are  talking  about? 

McBaine:   Yes.   And  that  was  unquestionably  the  most  arduous  job  that  the 

senior  partner  had.   It  was  difficult  because  everybody  had  his  or 
her  favorites  --  but  only  "his"  in  those  days;  we  didn't  have  any 
senior  female  partners.   Everybody  had  a  favorite.   Also  you  had  to 
take  into  account  that  some  partners  thought  that  everybody  he  had 
working  for  him  was  a  genius.   The  next  partner  that  you  talked  to 
thought  that  everybody  he  had  working  for  him  was  a  dumbbell, 
[laughter]   You  had  to  balance,  in  your  own  mind,  what  they  told  you 
with  their  known  tendencies  either  for  praise  or  for  lack  of  praise. 
It's  absolutely  true,  although  it  sounds  funny. 

Hicke:    I  can  see  it  would  be  a  real  problem. 

McBaine:   Some  of  those  were  brilliant  men  and  some  were  our  dearest  friends, 
but  some  of  them  went  one  way  and  some  the  other.   One  of  them  had 
never  in  his  life  seen  a  fellow  who  wasn't  an  absolute  genius  --  I 
mean  one  working  with  him.   The  other  one  couldn't  give  anybody  any 
credit.   So  that  was  a  very  difficult  job,  and  I  don't  know  how  well 
I  did  it.   I  don't  know  whether  it  was  considered  successful  or  not. 
My  successors  felt  that  the  day  for  one  senior  partner  had  passed. 


146 

Hicke:    You  made  all  these  decisions  yourself?   I  mean,  at  least  the  final 
decision. 

McBaine:  Well,  I  was  simply  the  accumulator.   What  I  did  was  reach,  as  nearly 
as  humanly  possible,  a  consensus.   I  did  not  regard  it  as  an  indi 
vidual  prerogative,  ever.   And  I  don't  think  anybody  ever  thought  I 
did.   I  had  my  own  views  on  who  should  be  promoted  and  who  not.   But 
unless  I  could  command  the  support  of  a  substantial  majority  of  the 
other  seniors  in  the  firm,  I  never  tried  to  act. 

Hicke:    Your  views  just  went  into  the  pot  like  everybody  else's? 

McBaine:   That's  right. 

Hicke:    You  started  to  say  that  after  you  then  it  was  changed. 

McBaine:   Yes.   There  were  three  partners  next  senior  to  me  who  were  all 

equal.   Just  below  them  were  three  other  partners  who  were  equal  to 
one  another.   They  decided  that  they  would  make  all  six  equal  and 
that  they  would  have  a  plural  executive,  like  the  Swiss.   They  would 
have  six  equal  senior  partners.   I  was  against  that  and  told  them 
so.   One  of  the  reasons  was  that  all  a  lawyer  has  to  sell  is  his 
time,  and  to  have  your  six  highest-paid  men  all  sitting  together  on 
a  committee  discussing  every  administrative  problem  that  comes  up  in 
the  firm  was  simply  a  ghastly  waste  of  time  and  money  in  my  book.   I 
thought  it  was  a  very  foolish  way  to  go  at  it .   I  told  them  so,  but 
they  all  insisted  on  it. 

I  had  not  yet  retired.   I  had  a  year  to  go.   I  said,  "Well, 
I'll  appoint  you  all  to  an  ad  hoc,  senior  partner  committee  for  this 
coming  year.   Whenever  any  problem  comes  up  in  the  firm,  it  goes  to 
the  six  of  you  and  you  all,  without  my  participating,  decide  what 
should  be  done.   Then  come  and  tell  me.   I  am  reserving  the  last  say 
for  myself,  but  let's  see  how  it  works  out."  They  reported  it 
worked  fine.   They  had  no  arguments.   So,  they  became  six  equal 
senior  partners.   After  all,  when  I  ceased  to  be  the  senior  partner, 
I  had  no  authority  to  say  who  was  going  to  be  next.  There  is  no 
reason  why  the  retiring  senior  partner  should  have  that  authority. 
The  remaining  active  members  of  the  firm  have  got  to  decide  it.   And 
that's  what  they  decided. 

They  only  did  it  for  I  think  a  year.   Then  they  got  disen 
chanted  with  it  themselves.   Have  you  talked  to  Mr.  Kaapcke  yet? 

Hicke:    Yes.   But  we're  not  up  to  the  '70s  yet. 

McBaine:  Well,  you  ask  him  why  they  became  disenchanted.   So  at  some  stage 

they  discontinued  that.   They  went  back  to  a  single  senior  partner. 
As  I  say,  the  basic  reason  for  that  is  that  if  you  have  a  single 
partner,  you  don't  want  a  tyrant  in  there,  but  nobody  was  in  a  posi 
tion  to  be  a  one-man  band  after  Messrs.  Madison  and  Sutro.   After 
all,  their  fathers  were  founders  of  the  firm,  and  they  had  great, 
long-standing  prestige.   After  they  passed  on  or  out  the  problem  was 


147 


different,  psychologically, 
know. 


We  had  no  disaffection,  so  far  as  I 


Hicke: 

McBaine: 

Hicke: 


I  can't  really  say  what's  happening  today.   But  there  was  a 
period  when  the  young  sort  of  felt  that  soon  as  they  became  part 
ners,  they  ought  to  start  running  the  firm.   I  tell  you,  there's 
something  more  to  it  than  perhaps  you  think.   My  theory  was  an 
institutional  theory,  if  you  will.   Because  that's  what  this  firm 
is.   It's  long  since  ceased  to  be  a  personalized  practice  of  the 
law.   It's  an  institution.   We  have  some  people  now  who  were  in  the 
Korean  war,  or  maybe  they  were  late  for  some  other  reason.  They 
didn't  come  in  until  age  twenty-seven  or  twenty-eight.   But  gener 
ally,  they  come  in  now  at  maybe  twenty- five,  out  of  law  school. 
Well,  from  twenty-five  to  sixty-five  is  forty  years.   That  means  the 
lawyer  is  going  to  be  here  for  forty  years. 

Now  within  five  years  after  he  comes  here,  he  reaches  an 
X-dollars  level  and  he  is  participating  in  the  management,  let's 
say.   What  in  the  world  is  going  to  keep  him  interested  for  the  next 
thirty-five  years?   I  was  afraid,  and  I  still  am,  that  if  one  fol 
lows  that  sort  of  procedure,  you'll  find  middle-aged  people  who  sud 
denly  say,  "To  hell  with  it,  I  am  going  out  and  do  my  own  stuff." 
Now  practicing  law,  you  can't  quite  do  that  the  way  the  engineers  do 
down  in  Silicon  Valley:   just  march  out  and  start  their  own  com 
panies.   But  it  certainly  is  a  possibility.   If  that  sort  of  thing 
happens,  you  damage  the  firm  badly.   So  my  theory  was  to  bring  them 
along  so  that  each  year,  somebody  felt  he  was  advancing,  getting 
more  money  and  more  responsibility  and  more  position  in  the  firm. 

And  he  would  also  have  something  to  look  forward  to. 

And  had  something  to  look  forward  to.   What  the  current  thinking  is 
I  don't  know,  but  at  the  time  I  was  not  in  a  majority. 

Well,  there  are  still  a  few  wrap-up  questions  that  I  would  like  to 
go  over,  so  let's  put  those  off  until  the  next  time. 


The  Employment  Committee 

[Interview  continued:   July  28,  1986]## 


Hicke:    I  thought  we  could  just  start  this  afternoon  with  a  few  things  left 
over  from  last  time  on  law  firm  management.   Were  you  on  the  employ 
ment  committee  in  the  early  1950s,  or  did  you  start  that  committee? 

McBaine:   When  I  came  into  the  office,  Mr.  Sutro  was  a  one-man  employment  com 
mittee.   He  interviewed  everybody  that  came  to  the  firm  looking  for 
a  job.   I  don't  know  whether  he  was  the  senior  partner  at  that  time, 
but  he  was  one  of  the  four  top  partners  who  really  were  the  de  facto 
management  committee  of  the  firm,  not  legally,  but  in  actual  prac- 


148 


Hicke: 
McBaine: 
Hicke: 
McBaine; 


Hicke: 
McBaine: 


tice.   It  really  was  a  highly  uneconomic  thing  to  do  to  have  one  of 
the  most  valuable  partners  in  the  office  spending  his  time  inter 
viewing  every  applicant,  and  as  the  firm  grew,  the  number  of  appli 
cants,  of  course,  grew.   It  just  became  the  wrong  thing  for  him  to 
be  doing,  so  he  gave  up  being  the  sole  interviewer  and  employer 
[chuckling]  and  we  formed  an  employment  committee. 

I'm  not  quite  sure  whether  I  was  the  first  chairman  of  it  or 
not,  my  memory  is  not  that  good,  but  I  was  the  chairman  of  the 
employment  committee  for  a  number  of  years  when  the  job  was  not  as 
big  as  it  is  now  --  nothing  like  it,  probably  a  third  the  size,  a 
third  the  number  of  people.   I  traveled  around  the  country  going  to 
various  law  schools.   I  went  to  some  law  schools  in  the  East.   I 
particularly  enjoyed  my  visits  to  the  University  of  Virginia  Law 
School.   Charlottesville  is  a  beautiful  place  and  the  University  of 
Virginia  campus,  as  you  know,  was  designed  and  built  by  Thomas  Jef 
ferson.   It  is  one  of  the  beautiful  historical  buildings  in  America. 
I  enjoyed  the  whole  thing  thoroughly. 

The  only  part  of  it  that  was  really  not  enjoyable  was  that  as 
the  volume  increased,  most  of  the  law  schools  --  I'm  not  sure  the 
law  schools  limited  the  time,  but  I  guess  it  was  the  interviewers 
and  the  law  schools  together  --  reduced  the  time  that  you  talked  to 
a  student  to  thirty  minutes  and  then  to  twenty  minutes.   To  try  to 
make  some  judgment  about  somebody  in  a  twenty-minute  interview  is 
extremely  difficult  to  do.   If  you  started  about  8:30  in  the 
morning,  and  just  saw  one  after  another  until  you'd  seen  maybe  fif 
teen  people  in  the  course  of  a  day,  the  whole  thing  just  becomes  a 
blur.   It's  very  difficult  to  do  even  if  you  take  notes,  little  per 
sonal  notes  afterwards,  trying  to  remember  who  that  particular 
person  was.   Spending,  say,  two  days  at  a  given  law  school  like 
that,  it's  very,  very  difficult  to  do.   But  during  my  time  on  the 
employment  committee,  that  became  the  thing  to  do. 

Are  we  talking  about  the  "50s  now? 

I'd  have  to  verify  that. 

It  was  before  you  became  senior  partner? 

Oh  yes,  I  was  a  younger  partner  then.   It  used  to  be  that  when  stu 
dents  graduated  from  law  school,  they  went  around  looking  for  a  job, 
went  to  various  law  firms  and  tried  to  get  letters  from  people  to 
friends,  to  somebody  in  a  law  firm.   But  after  World  War  II,  the 
whole  process  changed,  and  the  law  firms  began  going  out  looking  for 
the  students.   I  think  it  was  inevitable  and  it  was  probably  the 
only  way  to  do  it,  but  I'm  not  sure  that  had  the  best  effect  on  the 
people  involved.   Perhaps  it  did. 

Was  that  the  law  of  supply  and  demand  that  was  working? 

Yes,  there  was  a  period  of  growth  of  law  firms  all  over  the  country, 
not  only  our  own  but  all  firms  almost  everyplace,  and  there  was  a 


149 

competition  for  the  better  students.  Everybody  wanted  the  law 
review  people,  and  in  those  days  egalitarianism  had  not  struck  the 
law  schools  to  such  an  extent.  Law  review  students  were  selected  on 
the  basis  of  grades:  the  top  people  in  the  class  in  grades  were 
named  as  editors  of  the  law  review. 

During  the  '60s  --  I  think  it  was  during  the  '60s  --  this 
changed  in  some  law  schools.  Some  law  schools  went  so  far  as  to 
refuse  to  tell  an  interviewer,  a  would-be  employer,  what  the  grades 
of  their  students  were.   They  took  the  position,  which  seems  to  me 
wholly  specious,  "All  our  students  are  first-class  lawyers  and 
therefore  it's  immaterial  what  their  grades  are."  They  wouldn't 
tell.   Also  on  the  law  review  they  began  to  select  law  review  edi 
tors  not  on  the  basis  of  grades  but  on  the  basis  of  whether  they 
were  interested  in  it.   Then  the  student  editors  would  pick  new  edi 
tors  from  the  next  year's  class.   Whether  that  still  goes  on  or  how 
it  is  now,  I  don't  know.   But  anyway,  the  interviewing  process  was 
really  the  lifeblood  of  the  law  firms  and  it  was  very  enjoyable,  but 
because  of  the  volume  plus  the  shortness  of  time  with  each  person, 
it  was  not  a  picnic. 

Hicke:    Apparently  the  written  record  was  not  all  that  complete  either.   Or 
did  they  furnish  you  grades  in  writing  if  you  asked  them? 

McBaine:   Oftentimes,  yes.   But  many  law  schools  would  say  that  the  person  was 
in  the  upper  third  of  his  class,  or  the  middle  third  of  his  class  or 
her  class.   It  was  mostly  "his"  in  those  days.   I  have  never  made 
any  study  of  the  correlation  of  success  in  the  practice  of  the  law 
with  grades.   It's  perfectly  obvious  that  anybody  who  has  been  a 
practicing  lawyer  will  tell  you  and  instantly  cite  you  many  cases 
where  there's  no  correlation  between  success  in  the  practice  of  the 
law  and  the  grades  in  school.   A  person  with  top  grades  in  school 
might  well  make  the  best  lawyer-professor,  I  don't  know,  but  on  the 
average  I  would  think  that  there  would  be  a  difference  between  the 
better  students  and  the  lesser  students,  let's  say. 

Hicke:     You  have  to  have  something  to  go  on. 

McBaine:   You  have  to  have  something  to  go  on  when  you  employ  them.   It's  part 
of  the  interviewer's  problem  to  make  a  judgment  on  whether  some 
body's  got  the  interest,  the  determination,  the  balance,  the  matu 
rity:   all  those  things  you  have  to  try  to  judge.   So  it  was  very 
interesting  work  which  I  did  for  quite  an  extended  period,  I  guess. 

Hicke:    And  then  did  you  eventually  have  other  people  helping  you? 

McBaine:   Oh  yes,  we  organized  a  committee,  and  in  the  early  days  I  think  we 
only  had  four  or  five  people  on  it.   I  can't  even  say  for  sure  how 
it's  done  now,  but  at  that  time  they  were  all  partners.   It  included 
maybe  the  chairman  and  one  or  two  middle-aged  partners,  let's  say, 
but  mostly  younger  partners.   And  oftentimes  we'd  use  a  partner  who 
came  from  a  particular  law  school  to  go  back  and  interview  at  that 
law  school. 


150 


Hicke: 
McBaine: 

Hicke: 

McBaine : 


Hicke: 
McBaine: 


Hicke: 


Then  the  law  schools  began  to  get  swamped  because  they  had 
firms  coming  from  all  over.   For  instance,  at  the  Harvard  Law 
School,  firms  would  send  interviewers  from  all  over  the  country.   I 
don't  know  how  many  they  had  but  probably  two  or  three  hundred  in  a 
year.   They  had  to  provide  space  for  those  people  to  interview  the 
students.   They  would  put  up  on  the  bulletin  board  a  notice  that  so- 
and-so  from  such-and-such  a  firm  was  coming  in  to  interview  on  a 
certain  date,  and  those  who  wanted  to  interview  for  a  job  would  sign 
up  on  the  bulletin  board. 

Then  some  of  the  law  schools  said,  "This  is  costing  us  money. 
We're  out  of  pocket  to  go  through  all  of  this  business."  So  they 
sent  out  a  notice  to  all  the  law  firms,  "if  you  want  to  interview  at 
our  law  school,  it'll  either  cost  you  X  dollars  a  year  or  you  will 
be  expected  to  make  a  contribution  to  the  school  of  X  dollars." 
[both  chuckle]   So  how  that  sorted  itself  out  I  don't  know;  I  don't 
know  what  the  practice  is  right  now. 


By  the  time  you  left  in  '77,  what  was  it  like? 
recruiting? 


Who  was  doing  the 


Well,  I  can't  tell  you  that.   I  don't  even  remember  who  succeeded  me 
as  the  chairman  of  it,  to  tell  you  the  truth. 

But  by  that  time  were  the  summer  clerks  coming  in? 

Yes,  but  in  nothing  like  the  number  they  do  now.   I  mean,  when  I  was 
last  concerned  with  the  employment  committee,  the  number  of  summer 
clerks  might  be  ten  or  maybe  twelve.   Now  we  have  forty  or  fifty. 
Another  thing  that  has  influenced  all  this  are  these  national  maga 
zines  on  the  law,  which  didn't  exist  when  I  was  a  younger  lawyer. 
In  fact,  they're  only  about  ten  years  old,  I  would  say. 

You  mean  like  The  American  Lawyer? 

Like  The  American  Lawyer  and  so  forth.  The  American  Lawyer  --  how 
they  go  about  getting  it  I  don't  know  --  runs  surveys  on  the  summer 
law  clerk  programs  and  then  they  publish  in  their  newspaper  which 
firm  in  San  Francisco  or  Atlanta  or  whatnot  has  a  good  summer  pro 
gram  and  which  has  the  worst  summer  program.   So  it  turns  into  sort 
of  a  --  well,  it  depends  on  one's  point  of  view,  but  from  an  old- 
fashioned  point  of  view,  it's  sort  of  hucksterism.   I  mean  that  it 
isn't  an  intellectual  relationship  between  the  lawyers  and  the 
would-be  lawyers.   It's  sort  of  a  selling  job  to  see  if  you  can  sell 
your  product  to  a  lot  of  prospective  buyers,  and  there  are  enter 
tainment  events  and  various  things  staged  for  all  the  summer  stu 
dents.   As  I  say,  when  I  went  to  work  practicing  law,  that  didn't 
exist  anyplace  in  America.   You  just  walked  around  the  street  and 
went  in  and  called  on  the  law  firms  and  asked  for  a  job  and  hoped 
somebody  would  talk  to  you  [both  chuckle]. 

You've  mentioned  some  of  the  qualities  that  you  were  looking  for 
when  you  were  interviewing,  I  believe.   How  did  you  go  about  deter 
mining  whether  the  person  you  were  talking  to  had  these? 


151 

McBaine:   I  don't  think  there's  any  catalog  of  virtues  or  that  anybody  put  it 
down  in  writing,  at  least  not  in  my  day.  Although  we  did,  during  my 
time  on  the  employment  committee,  write  up  a  resume  of  the  firm 
telling  what  the  firm  was  all  about,  what  kind  of  law  we  practiced 
and  what  the  procedures  in  the  firm  were.  That  was,  again,  a  part 
of  this  sales  tool.  We  not  only  gave  that  to  summer  law  clerks  who 
accepted  a  job  for  the  summer,  but  we  sent  it  back  to  the  law 
schools.  In  the  placement  offices  in  the  law  schools  they  would  have 
these  resumes  of  the  firm,  and  if  somebody  said,  "I  might  be  inter 
ested  in  going  to  San  Francisco,"  the  placement  officer  could  give 
them  this  resume  and  at  least  they'd  know  what  kind  of  a  firm  they 
were  dealing  with. 

But  as  for  the  interviewers,  we  did  not  systemitize  it  to  the 
point  of  listing  the  qualities  to  be  looked  for  because,  really,  I 
don't  think  you  can  do  that,  as  I  say.   It  depends  on  whether  you 
want  what  in  the  brokerage  business  they  refer  to  as  back  office 
employees.   I  don't  mean  to  denigrate  them  in  any  way,  but  the  same 
thing  is  true  in  law,  and  --  I  think  I've  mentioned  this  before  -- 
you  can  get  a  lawyer  who  is  very  shy,  very  reserved,  very  withdrawn, 
who  is  not  a  salesman  in  any  sense  of  the  word  but  who  is  perfectly 
brilliant  and  might  perhaps  be  one  of  the  finest  appellate  lawyers 
in  the  United  States.   If  you  start  out  with  a  judgment,  say,  that 
he's  got  to  look  like  a  Lucky  Strike  ad  and  he's  got  to  have  person 
ality  and  white  teeth  and  all  that  kind  of  thing  --  it  isn't  done 
that  way,  you  can't  do  it  that  way. 

In  a  firm  like  this,  there  are  lots  of  different  kinds  of  jobs 
to  be  filled,  and  you  look  at  everybody  from  that  point  of  view.   I 
hadn't  thought  it  necessary  to  say  this,  but  perhaps  I  should: 
every  person  that  we  employ,  we  employ  with  the  idea  that  he  or  she 
is  going  to  be  a  partner  and  a  senior  partner  in  the  firm  eventu 
ally.   Nobody  is  employed  with  the  idea  that  he  is  a  hired  hand  and 
employed  to  be  a  hired  hand  for  life.  We  just  don't  employ  lawyers 
that  way. 

Hicke:    I'm  glad  you  pointed  that  out. 

McBaine:   And  I  may  say  also,  another  thing  which  enters  into  this.   I  can't 
speak  for  a  lot  of  other  firms,  but  this  firm  --  I  don't  think 
there's  any  secret  about  it  --  has  never  required  a  capital  contri 
bution  from  any  lawyer  to  become  a  member  of  the  firm.   Many  of  the 
financial  firms  do.   They  require  very  substantial  capital  contribu 
tions  for  someone  to  become  a  partner  in  the  firm.   But  those  firms 
have  substantial  capital  as  part  of  their  operating  tools.  We 
don't,  of  course.   You  have  to  have  a  certain  amount  to  keep  up  the 
cash  flow,  to  keep  the  organization  going,  but  basically,  we  don't 
operate  off  money,  we  operate  off  the  brains  of  the  people  --  the 
lawyers  in  the  firm.   Money's  never  a  consideration,  and  it  doesn't 
make  any  difference  whether  the  person  you're  talking  to  is  a  son  of 
John  D.  Rockefeller  or  someone  still  owing  $20,000  in  loans  from  his 
student  days . 


Hicke: 


152 

Speaking  for  myself,  and  I  think  I  generalize  for  most  of  the  . 
people  who've  done  this  job,  you  look  at  every  person.   The  first 
person  you  look  at  you  think  may  be  suited  for  such-and-such  kind  of 
a  job,  and  the  next  one  might  be  totally  different.   One  who's  going 
to  be  a  trial  lawyer,  for  example,  has  got  to  have  certain 
attributes  that  someone  who  is  going  to  do  trusts  and  estates,  let's 
say,  doesn't  necessarily  have  to  have.  We've  never  been  a  spe 
cialist  firm;  at  least  in  my  time  with  it,  we've  covered  the  whole 
spectrum  of  the  civil  law  --  not  criminal  law  --  except  domestic 
relations  matters,  and  we've  never  undertaken  those.   If  our  clients 
need  help  in  that  field  we  usually  refer  them  out  to  lawyers  who  are 
specialized  in  that  field,  and  we  don't  do  criminal  law  except 
insofar  as  it  may  be  involved  in  antitrust  matters. 

Are  those  both  deliberate  decisions? 


McBaine:   Yes. 

Hicke:    And  are  there  some  specific  reasons? 

McBaine:   Well,  yes,  I  think  so.   I  think  a  business  firm,  which  basically  we 
are,  just  does  not  have  the  kind  of  surroundings  or  the  contacts 
that  the  criminal  law  bar  does,  and  this  is  common.   I  mean,  there 
is  a  criminal  law  bar,  and  the  business  law  bar  is  really  separate. 
There  are  very  few  firms  where  they  cover  both.   I  think  domestic 
relations  law  is  really  not  practiced  because  most  of  the  lawyers  in 
the  firm  are  simply  not  interested  in  it.   They  don't  have  to  do  it 
for  economic  reasons,  to  make  a  living,  and  they  find  it  distressing 
or  stressful,  an  unpleasant  occupation,  and  they  simply  don't  want 
to  do  it.   And,  to  an  extent,  that  is  true  of  criminal  law  practice 
as  well. 

Hicke:    Okay,  well,  back  to  the  employment  situation.   When  did  affirmative 
action  start  to  play  an  important  part  in  the  employment  policies? 

McBaine:  Well,  I  don't  know,  not  in  my  day.   At  least  we  had  no  affirmative 
action  plan  as  such. 

Hicke:    I  think  that  came  in  actually  when  you  were  the  head  of  the  firm,  in 
the  1970s. 

McBaine:   Well,  yes.   I  remember  something  of  the  kind,  but  I  must  say  that  we 
had  an  affirmative  action  plan  --  not  formally  and  officially  --  but 
we  had  an  affirmative  action  plan  in  our  firm  in  the  real  sense  ever 
since  the  days  of  President  [Dwight  D.)  Eisenhower,  because  I 
remember  that  President  Eisenhower's  attorney  general,  Herbert  Brow- 
nell,  called  Mr.  Sutro  one  day  and  asked  if  we  were  approached  by  a 
qualified  black  applicant  for  employment  as  a  lawyer,  would  we 
employ  him?   I  think  it  was  in  terms  of  a  "him"  in  those  days. 
Mr.  Sutro  talked  to  several  of  the  more  senior  partners,  and  my  rec 
ollection  is  that  unanimously  the  answer  was  yes,  and  this  was 
relayed  back  to  Mr.  Brownell.   But  it  was  quite  some  time  before  we 
had  a  black  candidate  for  employment  --  I  don't  remember  exactly  how 
many  years . 


153 

I  think  one  thing  that  was  tacitly  agreed  to,  or  expressly 
agreed  to  --  I  suppose  it  may  have  differed  with  some  people  --  was 
that  since  we  were  a  service  profession  that  depended  entirely  on 
the  quality  of  our  work,  and  because  of  the  very  intimate  relation 
ship  between  a  client  and  a  lawyer,  and  because  of  the  reputation  of 
our  firm  which  had  been  built  up  over  the  many  years  and  which  we 
were  not  about  to  allow  to  be  besmirched  in  any  way,  and  because,  as 
I  say,  all  a  lawyer  had  was  his  intellect  and  his  abilities,  we  were 
not  going  to  lessen  the  quality  of  the  firm  by  taking  people  who 
really  didn't  meet  our  standards  just  for  some  social  reason.   We 
felt  that  that  would  be  really  a  fraud  on  our  clients,  and  as  I  say, 
damaging  to  a  reputation  that  had  been  built  up  over  many  years.   So 
while  we  made  the  express  decision  at  that  time  as  far  as  minority 
groups  were  concerned  that  yes,  we  were  open  to  them,  we  were  not 
going  to  take  in  some  minorities  simply  so  we  could  say  we  had  some. 

Hicke:    That's  an  important  point.   I  found  an  affirmative  action  plan, 

which  I  think  probably  was  required  or  at  least  expected  of  busi 
nesses  in  the  1970s,  and  the  idea  of  the  plan  was  to  try  to  hire 
people  according  to  percentages  of  minorities  in  the  population. 
But  it's  clear  that  a  law  firm  could  not  undertake  that  kind  of  pro 
gram. 

McBaine:   Well,  I'm  not  familiar  this  plan  offhand  --  I'd  have  to  read  it  to 
refresh  my  recollection  --  but  all  I  meant  by  what  I  said  before  is 
that  long  before  this  thing,  we  had,  of  our  own  action,  developed  an 
affirmative  action  plan  in  that  we  specifically  and  expressly  made 
the  decision  that  we  would  employ  minorities  if  they  met  our  stan 
dards,  and  when  we  interviewed  at  law  schools  and  received  candi 
dates  off  the  streets  looking  for  jobs,  that  was  part  of  our  basic 
principles  all  this  time.   I  don't  remember  that  we  ever  had  any 
plan  where  we  said,  "We've  got  ten  spaces  for  next  year  and  we're 
going  to  reserve  those  for  somebody  or  another." 

Hicke:    Well,  that's  the  point:   you  really  can't  do  that  when  you  are 
trying  to  hire  the  most  qualified  people. 

McBaine:   That's  right.   I  may  say  we  had  some  minority  lawyers,  but  it  took 
us  a  long,  long  time  to  get  sufficient  minority  associates  so  that 
we  could  produce  some  minority  partners  in  the  firm,  and  there  were 
two  unfortunate  reasons  for  this.   One,  the  best  ones  --  I  can  think 
of  several  --  left  us.   They  didn't  stay  with  us.  They  came  as 
associates  and  were  here  two  or  three  or  four  years,  and  they  went 
with  some  foundation  or  they  went  into  a  government  job  where  they 
got  an  immediate  promotion  and  more  money.   These  were  often  jobs 
where  people  were  affirmatively  looking  for  minority  groups  for 
public  relations  reasons  and  gave  them  an  enhanced  salary  which  lost 
them  to  us.  With  our  program  of  six  or  seven  or  eight  years'  work 
as  an  associate  until  you  reach  eligibility  for  partnership  status, 
they  didn't  stay  the  course. 

The  other  reason  that  we  lost  very  promising  people  was  pres 
sure  from  their  own  racial  groups,  who  in  effect  looked  at  them  as 


McBaine: 


Hicke: 
McBaine: 


154 

sort  of  Uncle  Toms  because  they  had  joined  an  establishment  law  firm 
which  was  predominately  white,  and  put  pressure  on  them  to  come  and 
do  something  with  and  for  their  own  people.   I  am  absolutely  posi 
tive  in  several  cases  I  knew  intimately  that  they  received  a  lot  of 
pressure  like  that  and  eventually  dropped  out  of  the  firm,  either  -* 

ft 

--  to  do  some  other  job  or  go  and  form  a  small  firm  of  their  own 
with  an  opportunity  to  serve  their  own  people,  their  own  group,  to 
serve  as  clients,  because  we  didn't  have  a  lot  of  minority  clients 
here  among  the  major  business  establishments.   But  the  progress  over 
the  years  has  been  slow.   I  know  it's  slow,  but  I  think  when  you're 
working  with  an  intellectual  activity  and  with  highest  possible 
standards,  it's  bound  to  be  slow. 

What  about  women? 

Well,  that's  exactly  what  I  was  going  to  talk  about.   [both  chuckle] 
Women  had  the  same  problem,  but  the  women  progressed  much  more  rap 
idly  because  they  didn't  have  the  alternative  of  going  back  to  their 
own  kind.   As  for  the  other  element,  they  didn't  have  as  many  jobs 
open  to  them  where  people  wanted  somebody  for  public  relations  rea 
sons.   There  was  a  period,  and  there  still  is,  I  suppose,  when 
people  were  looking  for  female  directors  of  companies.   We  had  sev 
eral  very  able  women  lawyers  who  left  us  and  went  to  work  for  var 
ious  companies,  some  of  them  clients  of  ours,  and  became  a  director 
of  the  company.   Several  of  our  partners  with  careers  much  like  the 
male  lawyers  in  the  firm  have  become  directors  of  various  client 
firms . 

The  law  schools  were  turning  out  more  and  more  women  lawyers 
every  year.   Of  course,  women  are  not  a  minority  group,  they're  a 
majority  group.   [chuckles]   So  you  can't  talk  about  them  as  minori 
ties.   The  numbers  in  the  law  schools  were  up  to  where  in  many 
places  50  percent  of  the  entering  classes  were  women.   Obviously 
there  was  really  no  end  of  qualified  candidates  among  the  women. 
The  problem  wasn't  the  same.   I  don't  know  --  these  things  changed 
and  varied  from  time  to  time  --  but  I  think  over  the  past  twenty 
years  we've  been  one  of  the  top  firms  in  the  country  in  percentages 
of  women  lawyers  we've  hired,  and  I  believe  now  in  percentage  of 
women  partners. 

I  know  very  few  of  the  younger  ones  that  we  have  now.   I  know 
all  the  older  ones,  of  course,  and  they're  superb  lawyers  and  superb 
partners.  They  fit  right  into  the  heretofore  all-male  partnership. 

As  far  as  I  know,  there's  never  been  any  difficulty  at  all,  and 
certainly  during  my  time,  I  never  had  a  complaint  of  any  kind  from 
any  woman  lawyer  in  the  office  who  felt  that  she  was  being  shunned 
or  put  down  or  something  of  that  kind.   I  hadn't  thought  of  that 
before,  but  during  the  seven  or  eight  years  that  I  was  a  senior 
partner,  I  never  had  a  single  complaint  by  any  woman  lawyer  that  she 


155 

felt  she  was  being  unfairly  treated  in  any  way.  Now  they  may  have 
felt  that  way  in  some  instance  in  their  own  group  and  in  their  prac 
tice,  but  if  so,  they  handled  it  the  way  the  men  did:   they  fought 
it  out  right  in  their  own  groups.   I  don't  say  that  happened,  but 
I'm  just  saying  no  complaint  came  to  me.  The  more  I  think  about  it 
[chuckling]  the  more  extraordinary  I  think  that  is,  really. 

Hicke:    Yes  indeed.   Because  certainly  in  the  '70s  women  were  not  known  to 
keep  silent  when  they  had  a  complaint. 

McBaine:   Well,  we  had  some  incidents  that  maybe  some  of  them  took  more  seri 
ously  than  we  did.   I  don't  want  to  stir  any  smoldering  embers,  but 
there  was  one  period  when  the  younger  women  in  the  office  petitioned 
the  firm.   You  know  we  have  an  attorney's  manual  that  gives  all 
sorts  of  forms  and  instructions.   The  younger  ladies  wished  to  be 
called  Jane  Smith,  Esquire.   The  old  English  custom  is  that  lawyers 
are  called  Esquire  in  the  British  system,  which  of  course  was  their 
highly  classified  society.   Esquire  was  a  little  above  just  plain 
Mister.   But  unfortunately  Esquire  is  a  purely  male  term,  histori 
cally  speaking  [both  chuckle],  and  it's  a  bit  incongruous.  We  felt 
it  would  cause  more  laughter  outside  the  firm  than  it  would  do  good 
inside  the  firm.   [more  chuckling]  So  we  didn't  respond  to  that.   We 
tried  to  make  them  understand  our  point  of  view  and  it  died  down 
after  a  while,  but  that's  about  the  only  sexist  problem  that  I  can 
remember  in  my  term. 

Hicke:    That  is  truly  a  remarkable  record.  Wonderful. 

McBaine:   I'd  like  to  review  that  affirmative  action  plan,  then  maybe  I'd  have 
some  more  comments  for  it. 

I  know  the  lawyers  told  us  we  had  to  do  this,  but  my  feeling 
was  that  we  were  ahead  of  the  game  as  far  as  women  were  concerned, 
and  as  far  as  blacks  and  American  Indians  were  concerned,  we  were 
already  trying  our  best,  and  that  includes  Spanish-surnamed 
Americans  and  Orientals.   I'm  not  sure  that  we  had  any  Orientals  in 
the  early  '70s.   But  we  have  some  now  who  are  extremely  bright,  and 
we're  going  to  have  more,  I'm  absolutely  positive.  Wait  until  all 
these  Southeast  Asians  get  through  law  school.   We're  going  to  have 
plenty  of  them. 

Hicke:    They  are  really  hard  workers  and  extremely  intelligent. 

McBaine:   Bright  and  extremely  intelligent.  When  they  learn  the  system  and 
learn  the  law,  they're  going  to  be  very  effective. 

Hicke:    To  go  back  to  the  employment  of  women,  I'd  like  to  ask  you  about 
hiring  Toni  Rembe.   I  believe  she  was  the  first  woman  to  become  a 
partner.   She  wasn't  the  first  one  hired,  because  you  said  there 
were  some  women  lawyers  during  the  war. 

McBaine:   During  the  war  I  was  not  with  the  firm.   I  didn't  come  to  Pillsbury, 
Madison  &  Sutro  until  about  the  first  of  "47,  but  I  understood  that 


156 

the  firm  did,  as  many  of  the  firms  did,  employ  some  women  lawyers 
temporarily  during  the  war  years.   None  of  them  stayed  after  the  war 
was  over.   I  don't  want  to  make  it  sound  unfair  to  them,  but  you 
have  to  remember  that  by  law,  businesses  and  law  firms  were  obliged 
at  the  end  of  the  war  to  offer  returning  veterans  their  jobs  back, 
and  they  had,  by  law,  priority  over  any  temporary  help  that  had  been 
hired  during  the  course  of  the  war;  so  they  were  hired  on  with  that 
understanding.   So  by  the  time  I  joined  the  firm  in  '47,  none  of 
these  wartime  lawyers,  so  to  speak,  were  left. 

Hicke:    I  see: 

McBaine:   In  my  earlier  years  there  were  only  a  handful  of  women  in  law 

schools  in  the  country,  but  it  was  growing  and  there  were  women 
graduates  coming  out,  and  capable  women  graduates,  and  it  was  per 
fectly  obvious  they  were  going  to  be  a  major  factor  in  the  profes 
sion.   I  was  the  chairman  of  the  employment  committee  at  that  time. 

I've  forgotten  how  we  made  contact  with  Toni;  I  remember  that 
her  father  was  a  doctor  in  Seattle  --  that's  my  recollection,  at  any 
rate  --  and  why  she  came  to  San  Francisco  and  how  we  got  hold  of  her 
I  don't  remember  now.   But  I  do  remember  that  she  was  the  first 
woman  we  employed  after  the  war,  and  she  certainly  was  an  out 
standing  candidate.*  You  can  put  down  all  the  qualities  you'd  be 
looking  for  in  an  associate  you'd  want  to  hire,  and  she'd  rate  very 
highly  in  every  quality  you  can  name,  including  personality  and 
agreeableness ,  the  ability  to  relate  to  people,  as  well  as  being  a 
first-class  lawyer.   Not  only  that,  but  I  think  she's  mastered  all 
of  the  skills  that  so-called  all  male  schools  used  to  teach;  that 
is,  principally  the  logical  process.   At  the  same  time,  she  has  not 
lost  or  dulled  in  any  way  her  feminine  superiority  and  intuition  and 
innate  wisdom. 

Hicke:    She  sounds  like  one  of  those  superwomen. 

McBaine:  Well,  in  my  book  she  is.   [light  laughter]   She's  absolutely  out 
standing  and  she's  a  perfect  example  of  why  some  women  lawyers  are 
really  outstanding  because,  as  I  say,  they  have  an  advantage  on  a 
lot  of  the  men.   Intuition  is  virtually  nonexistent  in  most  males, 
and  certainly  with  smart  females  it's  a  real  weapon  in  their 
arsenal . 

\ 

I'm  perfectly  frank  to  say  that,  for  example,  if  my  wife  and  I 
meet  someone  new,  on  short  acquaintance  I  would  far  rather  trust  her 
judgment  as  to  just  what  kind  of  a  person  that  is  than  I  would  trust 
mine.   I've  learned  over  the  years  that  she  is  a  lot  better  at 
sizing  people  up  on  brief  acquaintanceship  and  new  acquaintanceship 
than  I  am. 


Rembe  was  employed  in  1964. 


157 


Hicke: 
McBaine: 


Hicke: 


McBaine: 


Did  you  interview  Toni? 


Yes,  I  did.   I  did.   I  wish,  as  I  say,  I  could  remember  whether 
someone  referred  her  to  us;  I  sort  of  think  someone  did.   I  think 
when  we  hired  Toni  we  did  not  go  to  the  law  schools  recruiting 
people;  I  don't  believe  that  had  started  yet.   People  came  to  the 
offices  looking  for  jobs.   I  think  somebody  wrote  a  letter  and 
recommended  Toni  to  us  . 

Well,  I  was  just  going  to  say  she  was  the  start  of  what's 
proved  to  be  a  very  successful,  well,  we  don't  regard  it  any  longer 
as  a  program.   I  mean,  we  might  have  to  put  in  an  affirmative  action 
program  for  male  lawyers  here  pretty  soon.   [both  laugh] 


That  was  actually  what  I  was  going  to  ask. 
coming  along  to  be  interviewed? 


Then  did  you  have  women 


Oh,  sure.   They  followed  along.   Oh,  yes.  We  employed  quite  a  lot 
of  them  and  they've  done  very,  very  well.  Nobody,  I'm  sure,  has 
ever  made  any  study  or  comparison  between  female  lawyers  and  male 
lawyers;  at  least  I  don't  believe  we  ever  have.   I  certainly  never 
did.   In  approaching  this  thing,  we  knew  the  percentage  of  females 
in  the  classes  was  rising  every  year,  and  therefore  we  got  more 
applicants.   When  we  interviewed  them,  it  was  a  matter  of  luck.   How 
many  really  outstanding  people  come  to  be  interviewed,  and  how  many 
duds  come  to  be  interviewed  or  do  we  get  when  we  go  to  law  school  to 
interview  them,  either  way? 


McBaine:   With  more  female  lawyers  coming  out  of  the  law  schools,  you  just 

automatically  get  more  female  hires.   I  think  that's  all  there  is  to 
it,  as  far  as  this  firm  is  concerned.   I  know  that  I've  seen  some 
figures  at  times.   Of  course  the  number  varies:   there  may  be  a  year 
when  for  new  hires  we  take  two-thirds  women  and  one-third  men,  or 
there  may  be  another  year  where  we  take  two-thirds  men  and  one-third 
women.   It's  sort  of  happenstance.   But  I  don't  think  this  process 
was  scientific,  or  that  we  said,  "We're  going  to  hire  this  one 
because  she's  a  woman."  We  hired  her  because  we  thought  she  was 
going  to  be  a  good  lawyer,  applying  exactly  the  same  criteria  that 
we  applied  for  the  males. 

I  think  the  net  result  has  been  that  we  have  more  female  law 
yers  in  this  office  than  any  office  in  town,  and  I  think  percentage 
wise  we're  way  up  at  the  top.   As  I  say,  I'm  not  claiming  any  great 
credit  that  we  did  this  because  of  any  devotion  to  any  ideological 
idea;  we  simply  hired  them  because  they  were  good  lawyers  and  we 
wanted  good  lawyers. 

Hicke:    Well,  that's  a  better  reason. 

McBaine:   I  know!   In  my  opinion  it  is.   That's  the  way  it  ought  to  work  and, 
as  far  as  we're  concerned,  it  has  worked. 


158 

Hicke:    We  have  talked  some  about  minorities,  and  I  don't  know  if  you  have 
anything  to  add  to  that  or  not. 

McBaine:   No,  I  don't  think  so.   As  I  mentioned,  we  did  make,  over  a  period  of 
years  certainly,  affirmative  efforts  to  recruit  minorities.   Dif 
ferent  partners  in  the  office  undoubtedly  had  different  views.   Some 
people  had  the  idea  that  this  was  the  thing  to  do,  socially 
speaking,  and  therefore  for  that  reason  certain  affirmative  actions 
should  be  taken  in  connection  with  minorities.   But  there  were 
others  that  were  perhaps  more  hard-headed  who  simply  said,  and  I 
think  accurately,  at  any  law  firm  for  major  clients  and  established 
clients,  the  clients  would  be  pleased  to  have  capable  minority  law 
yers  employed  in  their  law  firm.   So  there  are  a  combination  of  rea 
sons  why  any  sensible  major  law  firm  would  look  for  and  try  to  find 
qualified  minority  lawyers. 

All  I'm  saying  is  that  it  wasn't  from  an  eleemosynary  point  of 
view  this  was  done,  or  even  a  social  point  of  view,  a  social  liberal 
as  against  a  social  conservative,  but  it  was  done  because  those  are 
the  kinds  of  things  our  clients  would  not  only  object  to  but  that 
they  would  affirmatively  like,  given  only  the  criterion,  as  I  men 
tioned  before,  that  they  met  the  same  grade  everybody  else  met,  had 
the  same  qualifications  that  our  other  lawyers  met. 

Of  course,  there's  just  no  comparison  between  the  success  of 
women  and  the  success  of  the  minorities.   Now  we  get  women  minori 
ties,  but  the  idea  of  women  in  the  field  of  law  has  been  so  perva 
sive  that  it  doesn't  seem  to  me  anybody  really  has  to  bother  about 
it  much.   Minorities  is  a  difficult  question  and  a  different  ques 
tion.   For  one  thing,  as  I  mentioned  to  you  before,  there  are  all 
sorts  of  "pulls"  on  the  better  minority  students  who  come  out  of  the 
law  schools,  pulls  to  other  things  rather  than  to  a  firm  such  as 
this.  We  lost  a  lot  of  people  that  we  would  like  to  have  had 
because  they  thought  other  opportunities  were  more  attractive. 
Unquestionably,  the  same  thing  is  going  to  happen  over  the  period  of 
the  years.  We're  going  to  see  these  people  in  the  law,  and  as  long 
as  they  are  in  the  law  and  want  to  practice  the  kind  of  law  we  prac 
tice,  well,  they're  going  to  be  here. 

I  think,  for  example,  right  now  today,  possibly  the  best  mind, 
the  quickest  mind,  and  at  the  same  time  the  most  mature  and  the  most 
deep  mind  of  any  young  associate,  and  I  mean  in  the  first  two-three 
years  now,  that  I've  have  ever  worked  with  in  PM&S  is  a  young 
minority  lawyer  in  the  firm  who's  still  here,  but  that  I  worked  with 
for  several  weeks  a  few  years  ago.   He's  just  absolutely  out 
standing,  a  brillant  mind.   They're  going  to  prevail,  no  question 
about  it. 

Hicke:    And  carry  on  the  traditions  of  PM&S. 

McBaine:   That's  right.   I  hope  so.   He's  certainly  going  to  be  trained  that 
way. 


159 


The  Library  Committee 


Hicke:    I  wonder  if  you  would  elaborate  on  the  work  of  the  library  com 
mittee? 

McBaine:   Well,  to  show  you  how  far  back  in  the  firm  I  go,  when  I  went  to  work 
for  Pillsbury,  Madison  &  Sutro,  we  had  a  large  library,  but  we  had 
no  official  or  trained  librarian.  There  was  a  girl  who,  I  think, 
came  from  the  stenographic  pool  who  had  a  desk  in  one  corner  of  the 
library  and  was  supposed  be  in  charge  of  the  library,  but  she  had 
other  duties  as  well.   As  I  mentioned  briefly  before,  one  time  one 
of  the  lawyers  came  into  the  library  looking  for  some  up-to-date 
information  about  a  matter  of  tax  law,  or  some  field  of  law  for 
which  there  is  a  loose-leaf  service  where  supplemental  pages  come  in 
every  week  or  on  a  regular  schedule  and  are  filed  in  these  reference 
books . 

He  went  to  the  loose-leaf  volume  on  the  shelf,  and  looked  for 
it  and  couldn't  find  anything,  and  then  suddenly  looked  behind  her 
desk,  and  there  were  stacked,  unopened,  what  proved  to  be  three  or 
four  month's  accumulation  of  pocket  parts  [chuckles],  or  these 
loose-leaf  services  that  she'd  not  only  not  filed  but  hadn't  even 
opened  as  yet.   Well,  that  created  a  bit  of  a  crisis  and  led  to  the 
creation  of  the  library  committee,  or  if  it  had  been  created  previ 
ously,  it  led  to  the  activation  of  it. 

The  net  result  was  we  hired  a  professional  librarian,  but  she 
had  no  staff;  I  think  she  was  alone  in  the  library  at  that  time. 
However,  that  was  the  beginning  of  our  modern  library.   I'm  not  sure 
whether  my  memory  is  correct  or  not,  but  I  can't  recall  a  chairman 
of  the  library  committee  preceding  myself. 

Hicke:    Do  you  know  about  what  time  period  the  librarian  was  hired? 

McBaine:   No,  but  it  could  be  identified  if  necessary.   It  was  in  the  old 

library  on  the  19th  floor  of  the  225  Bush  building.   I  don't  know  if 
it's  been  mentioned  in  anyone's  interview  yet,  but  that  space  on  the 
nineteenth  floor,  in  which  the  entire  firm  was  originally  housed 
when  it  moved  into  225  Bush  Street,  was  expressly  designed  for  PM&S . 
The  executive  floor  of  the  Standard  Oil  Company  was  on  the  18th 
floor  and  the  floor  above  that,  the  19th  floor,  was  especially 
assigned  to  PM&S.   The  space,  as  I  say,  was  designed  with  lawyers' 
offices,  a  business  office,  and  the  library,  which  was  really  the 
file  room.   Whether  there  was  a  messenger  room  I  don't  remember,  and 
there  was  probably  a  duplicating  room,  but  those  were  the  basic 
areas  of  the  law  firm  at  that  time. 

Hicke:    Well,  just  a  digression  here:   was  there  much  going  upstairs  and 
downstairs?   It  was  very  easy  access  between  PM&S  and  Socal. 

McBaine:   Oh,  yes.   Yes,  there  was  a  great  deal  of  back  and  forth  traffic. 

Over  the  years,  and  especially  during  my  time,  as  the  firm  grew  it 


160 


Hicke: 
McBaine: 


got  so  that  every  year  or  two  we  would  have  to  ask  Standard  for  more 
space.  They  were  always  very  good  to  us.  We  leased  our  space  from 
the  company,  which  of  course  owns  the  building,  and  we  were  their 
prime  tenant,  but  they  had  other  tenants  in  the  early  days  as  well 
as  ourselves.  The  building  wasn't  completely  full,  but  then  all  the 
other  tenants  were  eliminated  and  we  were  the  only  ones  left. 

We  kept  pressing  them  for  space,  so  for  a  long  time  we  thought 
it  would  be  a  good  idea  if  we  got  some  space  elsewhere.   The  company 
did  not  want  the  lawyers  who  were  servicing  its  account  to  move 
away,  because  then  when  they  asked  to  see  somebody  or  needed  help  of 
some  kind  or  needed  advice,  there  would  obviously  be  a  delay  and  it 
would  be  not  nearly  as  efficient  as  it  was  having  the  lawyers  right 
on  the  floor  next  to  the  executive  floor.   We  investigated  several 
possiblities  of  acquiring  an  equity  interest  in  a  building,  but  it 
had  to  be  in  the  same  block  and  right  next  door  to  225  Bush,  where 
we  could  have  a  bridge  across  an  intervening  courtyard  or  something 
of  that  kind.   We  tried  for  several  years  to  find  an  arrangement 
like  that,  but  were  unable  to  put  one  together  that  we  thought  was 
reasonable  economically  for  us. 

We  just  kept  growing  and  we  were  pushing  at  the  seams  at 
225  Bush,  but  the  chief  executive  officers  of  Socal  at  that  time  did 
not  want  us  to  move  out  of  the  building  without,  as  I  say,  that 
immediate  access.   Later  on,  with  new  and  different  chief  executive 
officers,  they  changed  their  point  of  view  and,  in  effect,  consented 
to  the  firm's  taking  space  in  other  buildings  as  long  as  the  lawyers 
that  were  servicing  their  account  remained  easily  accessible  to 
them.   It  was  at  that  time  that  we  took  additional  space  in  the  Russ 
Building,  where  we  have  several  floors,  as  you  know,  and  to  the 
space  in  the  Adam  Grant  Building,  where  I  am  today. 

But  to  go  back  to  the  library  committee,  and  this  is  part  of 
the  story  of  all  this  growth,  we  soon  outgrew  the  facilities  of  the 
19th  floor  library;  they  simply  weren't  big  enough.   Consequently, 
we  moved  down  to  the  4th  floor  at  225  Bush  and  set  aside  the  west 
wing  of  the  4th  floor,  had  the  space  remodeled,  and  created  a 
library  there  with  walnut  paneling,  which  was,  I  thought,  quite 
beautiful  and  a  very  good  library. 

I  was  the  head  of  the  library  committee  at  that  time  and  became 
the  chairman  of  the  ad  hoc  committee  to  get  the  new  library  con 
structed.   It  was  a  very  interesting  job  which  really  I  enjoyed  very 
much.   I  learned  more  about  libraries  than  I'd  ever  known  before, 
[both  chuckle] 

Did  you  have  anything  to  do  with  determining  how  the  books  were 
selected? 

Oh,  yes.  That  went  on  constantly.  That  was  a  matter  of  filtering 
requests  from  the  lawyers  in  the  office.   The  standard  basics  were 
the  reports  of  the  decided  cases,  and  of  course  there  are  many 
volumes  of  those,  and  we  had  all  of  the  federal  courts  and  many,  if 
not  all,  of  the  state  courts  as  well. 


Hicke: 


McBaine: 


161 

In  addition  to  that,  we  have  the  specialized  reporting  ser 
vices,  the  kind  I  referred  to  where  you  have  a  loose-leaf  service 
and  the  supplemental  parts  come  in  periodically  and  have  to  be  filed 
in  volume,  and  those  things  plus  other  current  materials  of  that 
kind  were  ordered  really  on  the  request  of  lawyers.   If  the  lawyers 
had  a  need  for  something,  they  made  a  request  to  the  library  com 
mittee.   The  library  committee  would  approve  it  and  the  librarian 
would  then  arrange  to  purchase  it.   So,  as  I  say,  the  library 
reflects  the  requirements  and  requests  of  the  practicing  lawyers. 
That's  basically  how  it  ran. 

Now  I  don't  know  how  many  volumes  we  have  today.   The  librarian 
could  tell  you,  but  it's  probably  50  to  60  thousand  volumes.   One 
has  to  keep  in  mind  that,  even  with  ourselves  the  largest  firm  in 
San  Francisco  and  having,  as  far  as  I  know,  the  largest  library,  we 
still  rely  on  the  county  law  library  to  have  things  that  we  don't 
have.   For  example,  law  reviews  by  out-of -state  law  schools.  We 
have  the  Harvard  Law  Review  and  the  Columbia  Law  Review  and  the  Yale 
Law  Review  and  so  forth,  but  we  don't  have  law  reviews  of  all  of  the 
law  schools,  and  the  county  library  has  a  lot  more  than  we  have. 

But  as  I  was  saying,  we  outgrew  the  space  on  the  fourth  floor 
as  well.   It  wasn't  so  much  that  we  outgrew  space  for  the  tradi 
tional  text  case  reports  and  loose-leaf  services,  plus  the  current 
materials.   Being  retired  for  ten  years  now,  I  haven't  kept  up  with 
the  figures,  but  it  was  certainly  my  impression  the  times  I  went 
there  that  there  were  plenty  of  work  stations  for  lawyers  who  were 
doing  research.   What  we  really  ran  out  of  was  room  for  the  library 
staff.   That  began  to  be  a  problem,  and  we  started  expanding  down 
the  front  hallway  on  the  fourth  floor. 

It  really  was  pressure  there  that  led  us  to  move  again.   Now  we 
have  computerized  research  tools,  Lexis  and  Westlaw.   When  I  was 
active  on  the  library  committee,  we  had  Lexis  only,  just  the  one 
service.   A  lot  of  things  of  that  kind  in  the  modern  library  took 
additional  room,  so  about  a  year  or  two  ago,  we  moved  again  to  the 
twentieth  floor  in  225  Bush  and  took  over  the  space  of  the  old  Stan 
dard  Oil  Company  cafeteria,  which  the  company  had  decided  to  close. 
They  therefore  were  looking  for  something  to  do  with  the  space  and 
agreed  to  lease  it  to  us. 

I  should  say  that  my  term  as  chairman  of  the  library  committee 
ended  when  I  became  the  senior  partner.   It  may  have  occurred 
before;  my  memory  is  not  precise  on  that  point. 

Were  there  other  responsibilities  of  the  library  committee  besides 
the  books  and  the  space? 

One  of  the  things  we  were  always  struggling  with  was  how  to  make  use 
of  the  intellectual  output  of  all  the  lawyers  in  the  office  working 
on  scores  of  different  questions  at  any  given  time.   I'm  not  sure 
we've  satisfactorily  solved  that  problem  yet,  but  at  least  we  made 
an  attempt  at  it. 


162 

For  example,  if  some  lawyer  was  assigned  a  research  project  on 
a  given  point  of  law,  say  the  law  of  contracts,  he  might  spend  a 
week  in  the  library  researching  it,  write  up  a  definitive  memo 
randum,  and  give  it  to  the  lawyers  he  was  working  with.   It  might  be 
that  a  couple  of  months  later  another  lawyer  somewhere  else  in  the 
office  would  get  a  similar  problem  with  a  similar  question  of  law. 
Not  knowing  that  the  first  lawyer  had  just  done  all  this  work,  he'd 
go  in  and  do  another  week's  work  on  his  part.   So  we  tried  to  set  up 
a  legal  memoranda  file  and  index  it  so  that  it  would  be  useful  to 
the  lawyers  that  follow.   It's  a  very  difficult  thing  to  do,  and  I'm 
not  sure,  as  I  say,  that  it's  adequately  done  yet;  you'd  have  to  ask 
the  current  library  committee  their  opinion  on  that.   I  don't  think 
we  ever  got  it  adequately  done,  certainly  not  perfectly  done,  during 
my  time.   [chuckles] 

That  type  of  thing  engaged  the  attention  of  the  library  com 
mittee  constantly  to  see  if  we  couldn't  make  it  more  efficent. 

Another  thing  was  that  we  were  always  trying  to  find  ways  in 
administering  a  law  office  to  have  the  work  done  by  the  least  expen 
sive  personnel.   If  research  could  be  done  by  library  assistants 
rather  than  by  an  associate,  a  young  associate  or  older  associate, 
or  a  younger  partner,  obviously  his  time  on  an  hourly  basis  would  be 
worth  more  than  the  time  of  a  librarian  assistant,  who's  probably  a 
student  or  a  recent  graduate,  or  perhaps  studying  a  postgraduate 
course  of  some  kind.   We  tried  constantly  to  have  research  that 
could  be  done  by  library  staff  done  by  them.   Besides,  the  effi 
ciency  of  that  is  far  greater  because  they  are  dealing  with  that  all 
the  time,  whereas  the  lawyers  aren't. 

A  young  lawyer  might  go  a  couple  of  years  without  having  to 
know  anything  in  that  particular  field,  and  then  all  of  a  sudden  he 
gets  pressed.  Well,  then  he  has  to  know  where  the  source  materials 
are  and  who  the  source  authorities  are  and  so  on.   The  library  staff 
knows  that.   It  used  to  be  that  a  lawyer  simply  went  into  the 
library  and  did  the  work  on  his  own.   The  first  few  times  he  might 
ask  the  librarian  where  the  books  were,  but  twenty  years  ago  he 
didn't  ask  the  librarian  for  much  more  than  to  tell  him  where  the 
books  were. 

Now  the  librarian  gets  all  sorts  of  requests  from  the  lawyers 
for  location  of  materials,  reference  materials,  special  things  they 
want.  They  may  even  tell  the  librarian  the  problem  that  they're 
trying  to  research,  and  the  librarian  will  tell  them  what  source 
materials  there  are,  which  the  lawyer  won't  know.  That  is  a  con 
stantly  expanding  demand  on  the  librarian's  time.   So  we  have  now  a 
head  librarian  and  quite  a  few  --  I  don't  know  just  exactly  how 
many  --  assistants  that  help  lawyers  with  that  kind  of  thing,  which 
increases  the  efficiency  of  the  office  as  a  whole  and  lowers  our 
cost  that  we  have  to  bill  to  our  clients  to  cover. 

The  library  committee  was  an  interesting  job,  at  least  to  my 
mind  it  was.   I  suppose  some  people  wouldn't  like  it,  but  I  think  it 


163 

was  and  is  an  interesting  job  and  it  really  goes  to  the  heart  of  the 
process  in  the  firm. 

Hicke:    Who  else  was  on  the  committee  with  you,  do  you  recall? 

McBaine:   Well,  there  were  different  people  on  it  at  different  times  and  I 

have  difficulty  recalling  any  given  time.   No,  I  don't  really  recall 
now.  As  I  say,  I  can't  identify  what  years  I  was  on  it  and  what 
year  I  got  off. 

Hicke:    I'm  sure  it  occupied  a  fair  amount  of  your  time,  but  then  you  were 
doing  so  many  other  things  all  the  time  that  I  don't  know  how  you 
really  kept  track. 

McBaine:   All  these  things  are  very  difficult  if  you're  not  up-to-date  on  all 
of  them,  but  if  you're  up-to-date  on  them,  you're  really  on  top  of 
them,  then  it's  not  too  difficult  to  meet  the  next  day's  problems  or 
choices.   If  you  think  of  it  as  starting  from  scratch,  yes,  the 
answer  is  it's  an  awful  lot  of  work.   But  if  you're  really  on  top  of 
it,  it's  not. 

Hicke:    That  certainly  was  a  magnificent  project  to  be  on. 

McBaine:   It  was,  and  it  was  a  great  satisfaction.   I  know  Allan  Littman  is 
the  chairman  of  the  library  committee  now,  or  at  least  he  was  a 
couple  of  years  ago,  and  it  really  was  principally  his  project  to 
get  the  new  library  on  the  twentieth  floor  built,  which  I'm  sure 
you've  seen  and  is  a  perfectly  beautiful  library,  and  quite  a 
layout;  it's  much  more  modern  than  our  old  library. 

The  old  library  was  more  traditional,  as  I  say,  with  paneled 
walnut  shelving,  which  incidentally  we  were  able  to  afford  because 
in  working  on  the  plans  for  the  library,  I  soon  found  we  couldn't  -- 
I  didn't  think  we  should  --  afford  solid  walnut  lumber  to  build  all 
these  things,  but  then  we  we  discovered  veneer.   The  whole  library 
is  done  in  a  walnut  veneer  about  an  eighth  of  an  inch  thick.   Of 
course,  when  it's  put  on  right,  you  don't  know  that.   So  it  looked 
like  a  very  opulent  library  to  me,  but  it  was  within  affordable 
limits.   [chuckles] 

Hicke:    Well,  it  looks  elegant. 


Growth  of  the  Firm  in  the  1970s 


Hicke:    Maybe  we  can  just  go  to  the  next  topic  here,  [looking  at  outline] 

During  the  '70s  there  was  enormous  growth  of  the  firm.   I  don't  know 
whether  you  want  to  comment  on  it  in  general,  or  if  you  can  tell  me 
a  little  bit  about  whether  that  was  planned  for  and  how  it  was 
planned  for. 


164 

McBaine:  Well,  yes,  I  can  comment  on  it.   As  I  think  I  mentioned  to  you, 

Mr.  Madison  receives  the  credit,  in  the  minds  of  most  people  in  the 
firm,  for  thinking  long-range  after  the  end  of  World  War  II  and 
realizing  that  growth  in  law  firms  was  inevitable.   Some  partners, 
even  at  that  time,  were  loath  to  see  it,  but  others  welcomed  it,  and 
I  expect  probably  the  majority  felt  that  it  was  inevitable  and 
they'd  take  whatever  came.   Basically,  that  really  went  on  from  1945 
to  the  present  day.  We  had  no  policy  setting  any  maximum  number  of 
attorneys  that  the  firm  would  have  of  partners  or  attorneys,  either 
one. 

The  way  we  did  it  while  I  was  active  was  this:   each  year  we 
would  survey  each  of  the  practice  groups  within  the  firm,  that  is, 
those  people  doing  probate  and  estates,  those  people  doing  tax  law, 
those  people  doing  labor  law,  litigation  groups  --  there  are  a 
number  of  those  litigation  groups  --  informal  groupings  and  informal 
structuring  really,  but  with  an  older  partner  generally  recognized 
as  the  head  of  the  group.  We  would  survey  each  group  head  and  ask 
him  if  he  thought  --  he  or  she;  heads  of  the  groups  at  that  time 
were  "he's"  --  he  needed  any  additional  associate  lawyers  for  next 
year.   If  he  wrote  down  no,  or  five,  or  ten,  or  whatever  it  was, 
we'd  add  them  all  up  and  give  those  to  the  employment  committee. 

The  employment  committee  then,  when  they  interviewed  in  the 
spring  --  they  interviewed  in  the  fall  or  the  early  spring  --  for 
the  people  to  graduate  in  May  in  June  of  the  coming  year,  they  tried 
to  produce  the  number  of  candidates  that  this  aggregating  procedure 
had  led  to  by  the  survey  of  the  firm,  and  that  went  on  every  year. 

Hicke:     Isn't  that  kind  of  tricky,  to  plan  a  year  ahead  for  the  number  of 
people  you  need? 

McBaine:   Yes,  but  you  see,  what's  made  it  easy  and  what  is  really  astonishing 
is  that  every  year  we  have  grown.   You  see,  if  you  had  some  years 
where  one  year  you  grew  and  the  next  year  you  fell  back,  then  you  d 
be  very  leery  about  projecting  more  growth  in  the  third  year.   If 
you'd  grown  in  the  first  year  but  declined  in  the  second  year,  then 
you  might  well  not  employ  anybody  the  third  year. 

The  fact  of  the  matter  was,  we  grew,  and  I  mean  grew  in  the 
amount  of  work  we  had,  grew  in  the  gross  billings  that  we  had,  hours 
expended  in  clients'  time  every  year.   I  don't  believe  there's  been 
a  year  since  the  end  of  World  War  II  where  we  haven't  had  growth. 
How  long  that'll  go  on,  nobody  knows.   As  far  as  I  know,  the  only 
really  conscious  decision  that's  ever  been  made  on  the  subject  was 
when  Mr.  Madison  persuaded  his  co-partners,  the  senior  partners  at 
that  time,  that  there  would  not  be  any  artificial  limitation  put  on 
the  growth. 

Hicke:    During  this  time,  particularly  in  the  '70s,  you  continued  to  grow 

every  year,  but  there  was  a  change  in  the  way  many  corporations  han 
dled  their  legal  work;  there  was  a  great  switch  to  in-house  coun 
sels.   I  believe  I'm  correct  that  Bank  of  California  and 


165 

International  Harvester  both  began  doing  a  lot  more  work  in-house, 
and  I  think  PT&T  also.  And  yet,  PM&S  continued  to  grow,  although 
these  were  major  clients.   Can  you  comment  on  that? 

McBaine:   There  are  those  in  the  firm  who  looked  on  what  you're  talking  about 
as  a  mixed  blessing.   As  I  told  you,  Standard  never  had  a  legal 
department  of  its  own  as  such,  so  we  were  accustomed  to  having  a 
major  client  who  didn't  have  its  own  legal  department,  but  we  also 
had  work  done  for  many  clients  --  national  clients  and  local 
clients  --  who  did  have  their  own  legal  departments. 

Some  of  the  major  firms  in  New  York  really  don't  want  a  client 
that  doesn't  have  its  own  legal  department,  because  the  legal 
department,  generally  speaking,  does  matters  that  are  usual  and 
normal  to  that  particular  business,  not  necessarily  purely  repeti 
tive  but  that  come  within  their  area  of  experience  and  expertise. 
And  really,  that's  not  the  kind  of  business  that  a  major  law  firm 
with  specialists  in  the  different  fields  with  ten,  twenty,  thirty 
years'  experience  is  best  suited  to  handle.   And  so  the  New  York 
firms  say,  "Well,  that's  fine,  you  do  all  the  in-house  business  that 
you  want  to  but  when  you  get  into  real  trouble,  you  come  to  us." 

When  the  client  is  in  real  trouble  is  when  you're  most  assured 
of  getting  paid,  so  that  I,  for  one,  having  had  some  experience  in 
New  York  --  maybe  that  affected  my  attitude  --  was  not  particularly 
concerned  about  either  the  Bank  of  California  or  the  telephone  com 
pany.   For  example,  we  still  do  work  for  the  telephone  company.   I 
don't  know  what  our  billings  run,  but  I  wouldn't  be  a  bit  surprised 
if  they  ran  as  much  as  our  total  billings  did  before  they  put  their 
legal  department  in.   That's  because  of  the  growth  in  business  and 
the  inflation  in  the  dollar  in  that  length  of  time,  but  I  don't 
think  that  made  any  serious  difference.   Now  there  may  have  been 
some  years  when  the  firm's  income  didn't  grow  appreciably,  I  don't 
know  about  that,  but  probably  the  work  did. 

Hicke:    Doesn't  it  make  it  somewhat  more  chancy,  though,  if  you  wait  for  the 
major  crises  to  come  along?   It's  less  steady  in  your  expectations, 
probably.   Or  did  you  have  so  many  firms  coming  to  ask  for  help  that 
you  turned  many  away? 

McBaine:   Yes,  we  certainly  did  turn  many  away.   One  of  our  major  problems  is 
to  be  sure  that  we  don't  get  into  a  situation  where  we  have  a  con 
flict  of  interest.   You  see,  I  don't  know  if  you've  asked  anybody, 
or  I  don't  know  whether  this  is  privileged  information  or  not  -- 
what  the  firm's  current  management  would  say  about  it  --  but  we  have 
several  thousand  clients  on  our  client  list  and  in  our  client  files. 

Hicke:    I've  seen  a  computer  printout  --  it's  huge. 

McBaine:   Yes,  it's  huge.   So  when  business  doesn't  come  in  from  one  quarter, 
it  comes  in  from  another.   There  isn't  any  great  peak  and  valley, 
normally,  in  it,  if  you've  got  a  client  base  of  that  size.   If  you 
had  a  smaller  firm  with  four  or  five  attorneys,  sure,  you  can  get 
some  terrific  upheavals. 


Hicke: 
McBaine: 


166 

But  the  size  and  variety  and  complexity  of  our  clients  requires 
care  regarding  conflict  of  interest.   For  instance,  when  we  were 
general  counsel  for  the  Bank  of  California,  we  didn't  represent  any 
other  major  bank  here,  although  the  Bank  of  America  had  asked  us  to 
numerous  times.  When  they  created  their  own  legal  department  --  I'm 
not  familiar  precisely  with  the  Bank  of  California  account,  but  it 
may  well  be  they  were  giving  some  of  their  business  to  other  law 
yers  --  we  felt  free  to  take  some  Bank  of  America  matters  which  we 
never  had  taken  before.   So  one  of  the  very  important  things  that 
you  have  to  do  when  you  reach  any  size  like  this  is  to  make  very 
sure  that  you  don't  get  into  a  fix  where  you're  representing  a 
client,  for  example,  whose  interests  are  in  direct  opposition  to 
another  one  of  your  long-standing  clients,  even  though  at  that 
moment  you  might  not  be  actively  engaged  in  anything  for  that  long 
standing  client. 

If  some  company  has  been  coming  to  you  with  their  major  legal 
problems  --  let's  say  they  have  an  in-house  legal  department,  but 
they've  been  coming  to  you  with  their  major  legal  problems  for 
twenty  years  --  and  then  some  new  company  has  suddenly  blossomed  and 
now  is  doing  a  tremendous  business  --  worth  hundreds  of  millions, 
and  it  comes  to  you  and  wants  you  to  bring  a  suit  against  the  first 
corporation,  you  say,  "I'm  sorry  we  can't  do  it."  What  with  the 
complications  of  various  subsidiaries  with  different  names,  it's  a 
terrific  job  to  be  able  to  keep  track  of  all  those  things. 

How  did  you  keep  track  of  it? 

Well,  if  we  didn't  have  a  computer  it  would  be  extremely  difficult, 
I  imagine,  to  do  it.   But  the  computer  makes  it  easier.   A  check  has 
to  be  made  when  every  piece  of  business  comes  into  the  office,  and 
particularly  any  new  piece  of  business  or  for  a  new  client,  a  con 
flict  of  interest  check  has  to  be  made  before  we  can  answer  either 
"Yes,  we'll  do  it,"  or  "No." 


Computers 


Hicke:    Speaking  of  the  computer,  was  it  while  you  were  senior  partner  that 
the  firm  got  a  computer  first?  Or  were  you  involved  in  that  at  all? 

McBaine:   Well,  our  first  use  of  computers  was  when  we  were  representing  IBM. 
Hicke:    Yes,  for  the  lawsuit  backup. 

McBaine:   Yes.  Then  the  first  information  for  a  client  other  than  IBM,  where 
we  sort  of  had  to  do  it  on  our  own,  was  for  the  antitrust  cases 
against  Standard  Oil  of  California.   My  memory  is  not  all  that  accu 
rate  on  exactly  when  the  use  of  computers  in  our  office  procedure  -- 
what  we  call  the  business  office  --  began,  but  my  recollection  is 
that  we  started  out  with  IBM.   I  don't  think  that  I  had  anything  to 


167 

do  with  the  selection  of  an  IBM  computer.  'I  think  that  was  handled 
by  what  we  called  in  those  days  the  managing  partner.  This  was 
before  we  had  a  professional  business  manager  for  the  firm. 

Hicke:    This  was  Mr.  [Bud]  Dapello? 

McBaine:   Mr.  Dapello  was  the  office  manager.   But  the  partner  who  was  the 
boss  of  the  office  manager  and  the  business  staff  was  called  the 
managing  partner,  as  distinguished  from  the  senior  partner,  or  head 
of  the  firm.   This  was  general  in  most  major  law  firms.   He  was  usu 
ally  a  fairly  senior  partner  who  got  the  job  for  whatever  reason  -- 
whether  he  liked  the  work,  or  was  made  available  because  somebody 
had  to  do  it,  because  he  often  spent  half  his  time  on  doing  that 
rather  than  practicing  law.   Once  you  reach  a  certain  size,  it  obvi 
ously  doesn't  make  much  sense  to  have  one  of  your  top  partners, 
drawing  one  of  the  major  participations  out  of  the  firm,  supervising 
the  office  manager.   So  we  don't  do  it  anymore,  but  then  we  did.   I 
think  the  managing  partner  and  Mr.  Dapello  were  the  ones  who 
probably  made  this  decision. 

It  gradually  grew.  We  put  it  in  originally  to  do  the  payroll. 
You  could  really  talk  to  the  people  in  the  computer  room.   But  then 
I  think  the  second  thing  they  did  was  to  put  on  the  computer  the 
time  sheets.   Each  lawyer  in  the  firm  is  required  --  and  should  at 
the  end  of  each  day  --  fill  out  a  time  sheet  which  records  how  he 
spent  his  time  during  the  day,  and  for  what  clients.   A  record  is 
kept  of  all  that,  so  that  when  periodically  --  every  month  for  some 
clients,  every  three  months  for  some  clients  --  time  comes  to  bill 
those  clients,  the  billing  partner  can  review  the  time  spent  on  a 
printout.   It  shows  just  how  much  time  has  been  spent  by  each  lawyer 
during  the  billing  period,  whatever  it  is  --  the  past  week,  past 
month,  past  three  months  --  on  what  matters.   It  was  obviously  a 
great  step  forward  to  be  able  to  keep  that  much  data  in  there.   You 
can  imagine  doing  that  for  450  lawyers.   So  it  gradually  extended  to 
covering  everything  done  in  the  office  except  for  the  calendar  desk. 

We  called  it  the  calendar  desk,  because  by  that  time  there  were 
at  least  two  or  three  people  on  that  job.   They  are  the  people  who 
keep  a  record  of  all  of  the  dates  when  various  legal  procedures  have 
to  be  performed.   To  give  you  the  simplest  possible  example:   a  com 
plaint  is  served  on  Mr.  X.   Mr.  X  comes  to  us  and  says,  "I've  been 
sued,  please  represent  me."  We  would  say  we'd  be  happy  to. 

So  the  first  thing  you  do  is  you  create  a  file  and  enter  that 
complaint  in  the  file.  You  note  the  date  on  it  and  the  date  it  was 
served.   Let's  say  you  have  thirty  days  in  which  to  plead  to  that 
complaint,  answer  it  or  make  some  motion;  otherwise,  if  you  don't  do 
anything  at  all,  the  plaintiff  will  take  a  default  judgment  against 
your  client  Mr.  X.   So  someplace  in  the  office,  you've  got  to  put 
down  on  there  thirty  days  from  now,  "Answer  due  to  complaint  against 
Mr.  X,"  by  whatever  lawyer  it  is  that's  handling  that  --  say 
Mr.  Smith. 


168 

Then  at  a  certain  time,  say  a  week  before  that  date,  the 
calendar  office  sends  out  a  notice  to  Mr.  Smith  on  pink  paper 
[chuckles]  --  pink  or  reddish  paper  so  it  won't  get  lost  --  in  which 
this  case  is  listed  for  Mr.  Smith.   There  is  a  tabulation  of  names 
up  at  the  top  and  you  look  for  your  name  on  there.   For  Mr.  McBaine 
it  says  seven  and  eight,  let's  say.  Then  you  look  down  here  on 
these  listed  matters,  and  seven  says,  "Answer  the  complaint  against 
Mr.  X  by  such-and-such  a  date."  Here  again  you  can  imagine  what 
that  is  now  with  the  size  of  the  groups  we  have.   I  think  about  half 
the  lawyers  in  the  firm  are  litigators  nowadays,  so  that  means  200 
or  something-odd  litigators.   I  believe  some  law  firms  do  have  that 
on  a  computer,  but  at  least  in  my  day,  and  this  includes  me,  we  just 
didn't  quite  have  the  nerve  to  put  that  on  a  computer. 

Hicke:    You  didn't  trust  the  computer  or  the  person  who  was  doing  the  work 
on  the  computer? 

McBaine:   I  didn't  trust  the  computer.   I  mean,  the  consequences  of  a  break 
down  in  the  computer  were  so  catastrophic  that  we  just  didn't  dare 
do  it.  Whether  the  firm  does  it  now  or  not,  I  don't  know,  because 
there  are  now  supposedly  foolproof  computers.   Tandem  Computer  has  a 
computer  system  where  they  have  three  or  four  computers  in  tandem. 
Supposedly,  if  the  first  one  breaks  down,  the  second  one  immediately 
takes  over  and  you  don't  lose  your  databank  and  you  don't  lose  your 
access  to  your  data.   But  whether  those  who  succeeded  me  have  had 
the  courage  to  put  the  calendar  on  a  computer  or  not,  I  don't  know. 
[both  chuckle] 

I  believe  that  we  were  one  of  the  first  firms  in  the  country  to 
go  to  computerizing  our  business  office  operations.   Milbank,  Tweed 
in  New  York  was  a  leader  in  New  York  in  this  field,  and  my  recollec 
tion  is  that  Francis  Marshall  was  interested  in  this  at  the  time  and 
also  was  involved  in  this. 


McBaine; 


I  would  say  we  are  in  sort  of  midstream  now.   We  have  not,  so  far  as 
I  know,  put  all  our  files  into  a  computer  database.   I  don't  know 
how  many  volumes  we  have  and  how  you  define  a  volume  exactly,  but 
the  number  of  pages  in  our  files  must  be  astronomical,  and  whether 
it  would  be  economically  worthwhile  to  put  all  those  into  a  computer 
database,  I  really  don't  know.   I  must  say  I'm  highly  skeptical  of 
it.   But  I  suppose  it  could  be  done  beginning  with  current  material, 
and  ultimately  then  the  noncomputerized  material  would  get  so  out  of 
date  that  it  wouldn't  make  any  difference.   I  don't  know  what  the 
firm  has  done  about  that. 

We  didn't  tackle  that  problem,  nor  did  we  tackle  the  problem  of 
individual  computer  consoles  or  terminals  on  each  attorney's  desk, 
which  is  done  in  some  firms  so  that  they  have  access  to  the  files. 
Instead  of  asking  their  secretary  or  calling  up  the  file  room  them 
selves  for  some  reason  or  another,  they  punch  it  up  on  their  own 
terminal.  The  economics  of  this  thing  is  unknown  to  me.   But  it's  a 


Hicke: 
McBaine: 


169 

little  like  the  research  for  legal  materials  when  you're  doing  work. 
Has  anyone  talked  to  you  about  that?  This  is  part  of  the  revolution 
that's  gone  on  in  the  practice  of  the  law,  and  we  at  least  were 
modern  enough  to  do  this . 

You  see,  our  legal  system  is  supposedly  based  on  the  principle 
of  stare  decisis,  that  is,  that  courts  are  supposed  to  decide  cases 
on  the  basis  of  previous  decisions,  the  way  they  have  been  decided 
particularly  by  superior  courts  higher  in  the  hierarchy  than  the 
deciding  court.   That  means  that  you  have  to  keep  a  record  of  all 
previous  decisions.   This  goes  back  really  to  pre-Constitution  days. 

We  have  a  library  of  --  I  don't  know  what  it's  up  to  now, 
probably  50-odd  thousand  volumes.   In  order  to  find  what's  in  that 
library,  many  years  ago  commercial  publishers  started  publishing 
excerpts  from  each  case  by  an  editorial  staff  of  lawyers  employed  to 
do  this.   Each  point  decided  in  a  given  case  was  put  down  in  a  brief 
sentence  or  two  and  those  points  were  then  congregated  together. 
Let's  say  you  have  a  case  that  decided  a  point  in  contract  law. 
You'd  put  this  under  Contracts  and  then  you'd  put  it  under  a  sub 
heading.   There  might  be  a  question  of  whether  you  did  have  a  con 
tract,  such  as  the  recent  Texaco-Pennzoil  imbroglio  that  you  may 
have  read  about  in  the  papers.   Was  there  a  contract  between  the  two 
parties?   Was  there,  let's  say,  an  offer  and  acceptance  to  consti 
tute  a  contract?  Well,  you'd  put  that  subheading  under  contracts. 

Up  until  the  advent  of  computers,  students  who  went  to  law 
school  were  taught  in  the  very  first  year,  as  soon  as  they  got  to 
law  school,  how  to  use  the  American  Digest  System  so  as  to  get  into 
all  these  case  reports  which  are  put  out  by  each  state  court  and  by 
the  federal  courts,  the  federal  district  courts  in  each  district, 
the  courts  of  appeals,  and  the  Supreme  Court  of  the  United  States. 
So  you  have  all  these  various  series  of  cases,  thousands  and  thou 
sands  of  volumes,  and  that's  the  way  you  look  up  the  law.   You  go 
into  the  American  Digest  System  and  you  look  through  their  periodic 
reports . 

It's  indexed? 

Yes,  it's  all  indexed  by  subject.   Criminal  law  in  one  volume,  con 
stitutional  law  in  one  volume,  contracts  in  one  volume,  property  law 
in  one  volume,  tax  law  in  one  volume,  and  so  forth.   Now  when  the 
computers  came  in,  some  commercial  companies,  again,  undertook  to 
take  all  of  the  decisions  and  put  them  into  a  computer  database  as 
they  came  out.   Then  they  went  back,  and  I  don't  think  anyone  has 
done  it  for  all  the  state  reports  and  so  forth,  but  just  to  make  it 
simple,  let's  say  they  went  back  and  took  all  the  Supreme  Court  of 
the  United  States  cases  and  they  put  those  into  the  computer  data 
base  _in  haec  verba,  I  mean,  word-for-word. 

Now  computers  can't  think,  so  you  cannot  ask  the  computer  to 
give  all  the  cases  on  a  given  subject.   All  the  computer  can  do  is 
to  pull  out  for  you  what's  in  it  and  that  means  the  exact  words. 


170 


There  are  two  commercial  systems,  Lexis  and  Westlaw,  which  came 
along  later.  What  you  do  is,  you  have  to  think  of  phrases  and  words 
that  the  court  must  use  in  deciding  a  case  on  the  subject  that  you 
have  before  you,  that  you  want  to  research  the  law  on. 

Hicke:    So  it's  done  by  key  words. 

McBaine:   It's  done  by  key  words  or  key  phrases.  The  first  thing  you  have  to 
do  is  you  --  there's  an  art  in  this,  really  --  pick  out  a  key  phrase 
or  a  key  word.   In  our  library  here  there  are  several  terminals,  and 
the  base  computer,  I  think,  is  in  New  Jersey;  I  don't  know  where  it 
is,  but  it  doesn't  make  any  difference  because  it's  hooked  up  by 
telephone  wire.   You  subscribe  to  this  service  and  pay  a  charge  for 
it,  a  base  charge,  I  suppose  for  rental,  and  then  a  charge  based  on 
usage.   You  turn  this  thing  on.   You  say,  "How  many  cases  are  there 
in  the  Supreme  Court  of  the  United  States  cases  in  which  the  fol 
lowing  phrase  is  used  and  or  --  either  one  --  the  following  words 
are  used?"  Just  say  one  phrase. 

Hicke:    What  might  be  a  typical  phrase? 

McBaine:   Well,  let's  say  you're  representing  a  passenger  who  got  on  the  com 
mute  train  down  here  and  who  started  to  commute  home.   The  train  hit 
a  rough  section  of  track,  and  somebody  had  put  his  suitcase  in  the 
baggage  rack  up  above  you  and  it  fell  off  and  hit  him  in  the  head 
and  damaged  his  spine,  let's  say.  Well,  the  very  first  thing  you 
want  to  look  at  is  "railroad."  You  can  start  with  that,  and  then 
you  can  say,  "overhead  rack,"  or  "neck  injury."  You  can  start  with 
a  very  broad  classification  and  you  say  to  the  computer,  "How  many 
cases  are  there  in  the  database  that  contain  these  words?"  If  you 
just  say  "railroad,"  obviously  they're  going  to  come  back  and  tell 
you  thousands,  so  that  doesn't  do  you  any  good.   You've  got  to 
narrow  it  down  some  more.   You  keep  narrowing  it  down  by  thinking  of 
phrases  that  the  court  must  have  used  in  an  opinion  in  deciding  a 
case  like  yours  until  it  comes  up  with  whatever  number  you're 
willing  to  look  at,  twenty-five  or  ten  or  whatnot. 

Hicke:    So  you  would  say  "railroad"  and  "neck  injury"  and  "spine  damage"? 

McBaine:   That's  right,  and  maybe,  "rough  track."  Then  it  comes  up  and  it 
says,  ten.   Then  you  ask  for  the  names  of  the  cases,  and  the  com 
puter  will  spell  out  the  names  of  the  cases.   Then  you  punch  a 
button  and  it  prints  out  the  names  of  the  cases,  and  you've  got  a 
sheet  with  ten  cases  on  it,  you  see.   I  suppose  there  are  some 
people  who  don't  have  basic  libraries  like  we  have,  so  those  cases 
are  in  the  computer,  as  I  say  in  haec  verba,  word-for-word,  and  you 
can  get  the  whole  opinion  printed  out  if  you  want  to.   It's  expen 
sive  and  takes  some  time,  and  we  don't  do  that.   You  take  this  list 
of  cases  and  then  you  go  to  the  library  and  pull  out  the  books  where 
these  cases  are  --  there's  a  volume  number  and  a  page  number  and  a 
title  number  for  each  case,  you  see  --  and  then  you  read  them  in  the 
reported  cases. 


171 

When  Lexis  was  first  put  in  the  office,  each  partner  was  given 
an  introductory  session  in  how  to  use  it.   As  you  know,  one  of  the 
problems  with  computers  and  lots  of  people  is  that  the  computers  are 
not  "user  friendly"  [both  chuckle],  that's  the  terminology  that's 
used.   It's  like  the  first  time  you're  asked  to  dictate  into  a  dic 
tating  machine,  you  simply  [more  chuckling]  freeze  up.   I  know  if  I 
have  something  I  want  researched,  I  write  out  the  phrases  I  want  and 
give  it  to  the  librarians.   They're  familiar  with  the  system,  they 
do  it  all  day  long,  and  they  know  how  to  start  the  machine  and  get 
it  on  line. 

. 

Hicke:    Much  more  efficient. 

McBaine:   It's  much  more  efficient  that  way.   The  younger  lawyers  I'm  sure  are 
much  more  adept  at  this  than  we  older  lawyers.   I  don't  know  what 
they  do  in  law  school  now,  but  I  think  they  must  train  law  students 
in  how  to  use  these  in  law  schools  now,  so  that  lawyers  coming  into 
the  office  now  probably  are  already  knowledgeable  about  computers. 
It's  not  very  difficult  but  it  requires  a  totally  different  thinking 
process,  you  see.   Instead  of  thinking  of  subjects,  like  if  you  were 
talking  about  the  case  I  gave  you,  the  accident  to  the  passenger  on 
the  railroad  car,  you'd  think  immediately  of  torts,  which  is  a  per 
sonal  injury,  you  see  --  a  compensable  personal  injury.   But  the 
subject  has  nothing  to  do  with  the  Lexis  method,  it's  just  the  words 
and  phrases. 

Hicke:    That's  very  interesting.   Well,  with  the  number  of  cases  expanding 
so  much  every  year,  obviously  it  would  be  impossible  to  look  up  all 
of  them. 

McBaine:   That's  right,  and  as  this  thing  goes  on,  in  another  fifty  years, 

with  the  number  of  cases  that  are  decided  each  year  --  I  don't  know 
what  they  are,  but  they're  in  the  thousands  --  the  American  Digest 
System  is  going  to  become  enormously  unwieldy  and  yet  the  computer 
will  be  no  more  unwieldy  than  it  is  right  now.   It  does  all  that 
work,  sorts  it  out  for  you. 

Hicke:    Makes  you  wonder  how  we  would  have  ever  made  it  without  the 
computer. 

McBaine:   Well,  that's  what  the  young  ones  will  think,  probably.   [both 

laugh].   But  they  lose  something,  mind  you,  because  you  don't  have 
that  constant  refresher  of  the  various  subdivisions  of  the  law  that 
you  had  by  using  the  American  Digest  System.   It  requires  you  to 
think  in  terms  of  subjects:   now  what  kind  of  law  is  it  that  would 
cover  this  particular  thing  I'm  talking  about? 

Hicke:    Will  that  have  an  impact  on  the  law? 

McBaine:   I  don't  know.   I  don't  know  whether  it's  of  any  importance  or  not. 

Hicke:    But  it  is  a  different  structural  way  of  thinking. 


172 

McBaine:   Yes.   A  mental  block  occurs  to  older  lawyers  when  they  first  meet 
this  requirement  for  thinking  of  terms  in  words  or  phrases  instead 
of  in  concepts,  in  subject.   So  I  imagine  the  younger  lawyers  are 
going  to  be  much  more  facile  than  the  older  ones  are  in  using  this 
phrase  and  word  technique  to  find  what  they  want. 

Well,  what's  next? 


Financial  and  Business  Procedures 


Hicke:    We're  still  talking  about  growth  and  change  here,  and  one  of  the 
other  changes  that  took  place  in  the  1970s  was  that  I  think  some 
clients  began  to  ask  for  more  specific  breakdowns  of  charges.  Did 
that  come  about  during  your  term? 

McBaine:   I  wasn't  conscious  of  that  in  the  way  that  you  put  it.   It's  always 
been  true,  was  in  my  day  always  true,  that  some  clients  asked  for 
more  of  a  breakdown  than  others  did.  Whether  that  practice  grew  so 
our  clients  were  asking  more  for  breakdowns,  I  don't  really  know. 
Let's  put  it  this  way:   I  don't  really  know  if  we've  ever  sued  a 
client  for  nonpayment  of  a  bill.   I  can't  remember  that  we  ever  did 
in  the  time  when  I  was  active.   But  obviously  we  would  want  to  be 
able  to  do  so  if  necessary,  if  for  some  reason  we  felt  we'd  done 
some  serious  work  and  the  client  simply  said,  "I'm  not  going  to  pay 
you,"  for  some  reason. 

If  we  did  bring  a  suit,  we  would  obviously  have  to  demonstrate 
the  work  we'd  done.   And  that  means  that  we've  got  to  have  these 
records  that  I  was  describing  to  you,  these  so-called  time  sheets, 
which  detail  the  amount  of  time  spent  on  what,  with  some  description 
of  the  work  on  which  the  time  was  spent.   What  was  the  work?  Was  it 
drawing  up  a  complaint,  was  it  preparing  an  answer  to  the  complaint, 
was  it  taking  a  deposition,  was  it  spent  in  trial  in  a  courtroom? 
So  we  have  always  kept  track  of  work,  and  certainly  in  great  detail 
since  the  advent  of  these  modern  time  sheets,  and  have  been  prepared 
to  demonstrate  that.   So  if  a  client  asks  for  it,  we  have  the  mate 
rial  . 

Now  whether  more  clients  have  asked  for  it  or  not,  I  don't 
really  know.   Firms  differ  in  their  practices  on  that  and  it  has  its 
pros  and  cons.   If  some  client  thinks  that  the  firm  is  sort  of  pad 
ding  its  bills  in  the  sense  of  maybe  spending  an  unreasonable  amount 
of  time  on  research  or  something  of  the  kind,  obviously  you  have  to 
be  prepared  to  justify  what  you've  done.   Basically,  it's  one  of  the 
virtues,  one  of  the  advantages  of  practicing  in  a  firm  like  this. 
You  have  to  use  your  judgment,  but  most  of  our  clients  who  employ  us 
for  matters  of  any  importance,  employ  us  on  the  implicit  or  express 
understanding  that  we're  really  going  to  research  the  law  as  far  as 
research  is  possible  --  that  we're  going  to  leave  no  stone  unturned. 
People  who  want  a  cut-rate  job  don't  hire  us.  That's  the  kind  of 
service  we  offer  and  that's  the  kind  of  service  our  clients  expect. 


173 

• 

Our  theory  would  be,  or  certainly  was  in  my  day,  that  we  would 
not  expect  any  PM&S  lawyer  to  go  into  court  and  file  a  brief,  let's 
say,  and  argue  a  given  point  and  have  the  opponent  come  up  with  some 
case  that  had  any  bearing  on  the  matter  at  bar  that  we  didn't  know 
about  and  hadn't  dealt  with  in  our  briefs.  Now,  if  you've  got  a 
small  practitioner,  an  individual  practitioner,  dealing  with  per 
sonal  matters,  obviously  they  can't  afford  and  their  client  can't 
afford  to  do  anything  like  that  depth  of  work. 


174 


VI  OVERVIEW  OF  PM&S 


Characteristics  of  the  Firm 


Hicke:    Well,  you  may  have  contributed  part  of  the  answer  to  my  next  ques 
tion,  which  is:   why  is  it  that  PM&S  has  been  so  successful?  Actu 
ally,  you've  contributed  a  lot  of  answers  all  the  way  along  [both 
chuckle],  so  maybe  you  could  just  sort  of  sum  up  in  an  overview. 

McBaine:   Of  course,  there  are  thousands  of  law  firms  in  this  country,  so 

you're  going  to  find  all  kinds  of  law  firms.   I  think  we  have  been 
successful  and  I  think  we  deserve  to  be  successful,  so  if  I  discuss 
why,  in  a  sense  I  am  rather  saying  praise  for  what  we've  done,  the 
way  we've  proceeded.   The  American  Lawyer  and  such  current  magazines 
about  law  firms  and  lawyers  --  I  don't  know  what  the  general  public 
thinks  of  them  or  whether  only  lawyers  read  them,  but  I'm  not  quite 
sure  that  they  are  good  for  the  profession.   Maybe  that's  an  old 
fogie  talking,  but  that's  the  way  I  feel  about  it. 

For  example,  one  of  the  phrases  that  they  use  and  the  attention 
they  focus  is  on  so-called  "rainmakers."  Well,  rainmakers  are  law 
yers  found  anyplace.   They  can  be  in  small  towns,  such  as  some  of 
the  great  criminal  lawyers  that  we  hear  about,  that  are  hired  all 
over  the  country,  and  so  on.   But  they  are  people  who  attract 
clients,  people  who  attract  notoriety.   I  don't  mean  that  in  a  dero 
gatory  sense,  but  their  names  do  become  widely  known  and  they 
attract  business.   Sometimes  they  don't  properly  staff  themselves  so 
as  to  take  care  of  the  business,  especially  as  it  grows.   I  think 
maybe  one  of  the  basic  characteristics  of  this  firm  and  many  others 
that  I  can  think  of  is  that  we  have  never  featured  rainmakers. 

Some  firms  take  the  attitude  that  the  fellow  who  brings  in  the 
business  is  entitled  to  all  of  the  fees  earned  on  the  work  for  that 
client,  no  matter  who  does  the  work,  or  he's  entitled  to  a  cut  of 
it.   He's  the  important  man  because  he  brought  in  the  business.   I 
don't  think  we  have  ever  adopted  that  point  of  view.   I  think  I  may 
have  mentioned  to  you  earlier  that  you  may  have  the  best  appellate 
lawyer,  the  best  brain,  the  best  writer  and  the  most  logical  and  the 
most  persuasive  writer  who  has  no  personality  at  all,  who  couldn't 


175 

attract  anybody  to  do  anything.  We  know  that  he's  a  superb  lawyer, 
and  it's  always  been  our  policy  that  he's  entitled  to  be  treated 
like  a  superb  lawyer  and  entitled  to  be  compensated  like  a  superb 
lawyer,  even  if  he  didn't  bring  in  any  business. 

Now  you  can't  have  everybody  in  the  firm  be  a  back  office 
lawyer,  so  to  speak,  again  in  no  derogatory  sense,  not  getting  out 
to  the  public.   He  doesn't  join  all  the  organizations  and  make 
speeches  on  politics,  he's  just  a  damn  good  lawyer  who  does  the 
work.   We  have  always  balanced  all  those  factors  together.   We  don't 
have  any  arithmetic  formula  for  doing  it;  it's  a  matter  of  common 
sense  and  balance.   But  too  many  firms,  in  my  opinion,  have  internal 
difficulties  because  they  don't  really  make  a  fair  distribution  of 
the  monetary  results  of  their  work. 

Hicke:    That's  got  to  be  a  crucial  decision. 

McBaine:   That's  right,  and  you  can't  have  a  firm  where  every  man  is  working 
for  himself  and  he  says,  "I  don't  give  a  damn  about  my  partners,  I 
don't  give  a  damn  about  the  firm,"  and  obviously  the  fellow  who  is 
capable  of  attracting  business  is  more  able  to  say  that  than  the 
other  type,  who  may  say,  "The  hell  with  it,  these  guys  don't  like 
me.   I'll  go  someplace  and  start  my  own  firm  and  hire  another  bunch 
of  lawyers,  and  we'll  run  my  firm  my  way."  Despite  all  of  the 
emphasis  in  The  American  Lawyer  on  dollars  and  how  much  gross  income 
firms  have  and  how  much  each  partner  gets,  we've  managed  to  maintain 
the  idea  that  this  is  a  profession  and  it  really  is  a  partnership. 

There's  a  spirit  of  or  a  recognition  of  some  sort  of  gratitude 
owing  to  the  firm  that  was  created  before  most  people  came  here. 
They  didn't  create  this  firm.   When  you  come  to  work  for  Pillsbury, 
Madison  &  Sutro,  the  next  day  you  go  out  on  the  street  and  people 
are  going  to  receive  you  with  more  deference,  if  you  will,  or  pay 
more  attention  to  you  than  they  would  the  day  before.   It  takes  a 
very  large  ego  to  say  that  I'm  more  important  than  all  of  that. 
We've  managed  to  instill  that  idea  of  partnership,  I  think,  in 
people . 

I  can't  speak  for  other  firms.   You  read  about  the  firms  that 
do  not  have  that  institutional  sense,  if  I  can  use  that  term,  where 
they  simply  thinV .  "Well,  I'm  here  today,  but  if  I  don't  like  it,  I 
can  go  someplace  else;  if  I've  got  so  many  clients,  I  can  go  any 
place."  I  hope  that  institutional  sense  continues.   It's  been  mutu 
ally  beneficial  over  many  years.   You  asked  me  about  interviewing 
for  new  associates.   I  think  this  professional  attitute  is  --  con 
sciously  or  unconsciously  --  one  of  the  things  that  our  interviewers 
look  for.   Somebody  who  is  really  out  for  a  fast  buck,  if  that's  his 
major  objective,  is  not  the  kind  we're  looking  for. 

We  also  are  not  looking  for  the  kind  who  merely  wants  to  come 
to  us  and  get  the  experience  of  working  for  a  first-class  firm  for  a 
couple  of  years  and  then  leave  and  go  someplace  else.   Now  we  can't 
avoid  that,  because  they  don't  tell  us  that,  even  though  that's  what 


176 

they  have  in  mind,  but  if  we  get  that  impression,  we  wouldn't  employ 
somebody.  We  don't  want  somebody  for  two  years.  He's  just  using  us 
as  a  post-graduate  course,  and  then  leaving. 


McBaine:  We've  done  various  things  to  try  to  promote  this  feeling  of  camara 
derie,  this  multiple  identity.   For  my  own  part,  one  of  the  things 
that  I  was  responsible  for  was  based  on  an  experience  I  had  as  a 
former  Rhodes  scholar.  When  I  came  back  to  San  Francisco,  there  was 
an  older,  former  Rhodes  scholar,  a  senior  partner  in  another  law 
firm  in  this  city,  as  a  matter  of  fact,  who  gave  an  annual  dinner  to 
other  Oxonians  in  San  Francisco  each  year  at  the  Bohemian  Club.   He 
gave  it  in  one  of  the  big  dining  rooms  with  portraits  of  former  mem 
bers  of  the  club  and  so  forth.   It's  a  very  elegant  room,  and  he  had 
a  marvelous  dinner  with  beautiful  wines  and  I  think  probably  port 
and  after-dinner  liqueurs.   It  was  a  black  tie  dinner.   While  it's 
commonplace  in  England,  let's  say,  it  was  the  kind  of  thing  that  was 
not  too  common  in  this  area,  at  any  rate,  and  yet  it  created  an 
enormous  feeling  of  civilization,  if  you  will,  of  what  we  were  there 
about  . 

When  I  became  the  senior  partner,  I  decided  that  we  ought  to  do 
the  same  thing  for  the  partners  in  this  firm,  and  so  we  did.   I 
instituted  an  annual  dinner  of  the  partners  and  everybody  had  to 
dress  up  --  black  tie  --  and  then  we  did  the  same  thing.   We  had 
some  sherry  to  start  with,  cocktails  too,  I'm  sure.  We  had  some 
beautiful  wines,  we  had  some  fine  brandies  afterwards,  or  some  old 
port.   I  expect  some  of  our  partners  had  never  had  port  in  their 
lives,  and  it  is  delicious  [chuckles],  if  you're  familiar  with  good 
port  . 

Anyway,  I  was  trying  to  instill  the  same  sort  of  feeling  that 
these  previous  dinners  had  instilled  in  me:   namely,  that  we  were 
the  partners  in  a  firm  that  would  hold  an  event  like  this.   As  I 
say,  it  was  a  highly  civilized  occasion  and  representative  of  an 
organization  of  achievement.   I  don't  know  what  the  attitude  of  most 
of  the  partners  was.   Some  of  them  liked  it  enormously,  and  I  think 
that  over  the  years  it  did  create  something  that  I  was  trying  to 
create.   I  hope  it  did.   It's  still  going  on. 

Then  we  added  to  that,  when  under  our  advisory  partnership 
plan,  the  first  advisory  partners  came  up  for  retirement,  so  to 
speak.   Then  the  dinner  was  given  in  honor  of  the  partners  who  had 
retired  at  the  first  of  that  year.   Mr.  Madison,  Mr.  Prince, 
Mr.  Bennett,  I  believe  had  all  died  before  this  took  place.   I  think 
Mr.  Sutro  was  probably  the  first  one. 

In  any  case,  each  year  we  honor  the  partners  who  have  just 
become  advisory  partners,  and  each  one  is  asked  to  give  a  little 
talk.   They  differ,  but  basically  all  of  them  are  reminiscences. 
Some  are  humorous  and  some  are  more  serious;  some  are  mixed.   In  any 
case,  I  hoped  it  helped  to  create  the  kind  of  firm  I've  been  talking 


177 

about,  where  you're  not  sitting  there  thinking  how  you  can  cut  the 
throat  of  the  guy  next  to  you  so  you  can  get  a  bigger  slice  out  of 
the  firm.  I  think  it's  been  quite  successful.  That's  why  I  asked 
you  if  you'd  read  the  talk  that  I  gave  when  I  retired. 

Hicke:    I'd  really  like  to  see  it,  if  you  could  find  it  for  me. 
McBaine:   I'll  give  it  to  you  and  you  can  read  it.* 

Hicke:    Yes,  I'd  like  to  very  much.   Mr.  [Charles]  Prael  told  me  about  the 
talk  that  he  gave,  but  he  didn't  have  a  written  copy.   [chuckles] 
His  was  off  the  top  of  his  head. 

McBaine:   Yes,  that's  right.   Well,  he  was  one  of  the  wittiest  and  most 

amusing  of  the  whole  bunch.   I  remember  it  very  well.   Maybe  because 
I  had  been  the  senior  partner,  I  thought  a  little  bit  more  in  the 
terms  of  the  kind  of  things  you've  asked  me  about.   My  talk  was  a 
little  more  serious  than  that. 

Hicke:    Well,  that's  the  sort  of  historical  tradition  that  is  an  example  of 
what  I  suppose  in  a  corporation  would  be  called  corporate  culture. 
Every  firm  has  its  own  kind  of  feeling,  and  that's  what  I  really  am 
asking  about. 

McBaine:   Well,  that's  right.   Of  course,  there  are  going  to  be  different  per 
sonalities  in  any  organization  like  this,  and  I  think  that  we've 
long  since  been  too  big  to  really  socialize  together.   That  is,  two 
partners  may  become  fast  friends  and  they  may  see  one  another 
socially  with  their  wives  and  exchange  dinner  parties,  but  that's 
never  really  been  done  by  the  firm  as  such,  and  we're  far  too  big  to 
even  think  of  anything  like  that.   So  you  have  to  do  something  to 
give  this  sense  of  commonality. 

I  think  I  may  have  mentioned  earlier  that  we  used  to  have  pic 
nics  down  at  Gene  Prince's  place.   Nobody  has  a  ranch  now  where  they 
invite  everybody,  and  again,  there 'd  be  such  a  horde  of  people  I 
doubt  if  it  could  be  done.   [both  chuckle] 

Hicke:    You'd  have  to  get  an  environmental  impact  report  first. 

McBaine:   That's  right.   But  we've  never  had  any  major  trouble  in  the  firm, 
which  is  something  I  hope  we  continue.   We've  had  people  who  split 
off,  of  course,  but  we've  never  had  anybody  split  off  because  of  any 
differences  within  the  firm. 

Hicke:  There  are  obviously  ways  that  the  people  at  PM&S  have  of  working 
with  each  other  that  hold  the  partnership  together.  But  there's 
also  such  a  thing  as  being  prepared  and  leaving  no  stone  unturned, 


*     Remarks  of  Turner  H.  McBaine  to  PM&S  Partners'  Dinner,  Bohe 
mian  Club,  March  25,  1977.   See  Appendix  I. 


178 

which  is  part  of  the  culture  too. 
McBaine:   Yes. 
Hicke:    And  is  that  passed  down  from  the  older  partners? 

McBaine:   Oh  yes,  there's  no  doubt  about  it.  There  isn't  a  formal  program  of 
that  kind,  but  of  course  there  is  the  idea.   I  look  back  on  my  early 
days  in  the  firm.   You  don't  have  to  think  of  how  it  works  from  the 
top  because  everybody  has  come  up  from  the  bottom,  and  that's  why  I 
said  to  you  earlier  that  my  theory  was  that  the  management  committee 
ought  to  be  composed  not  necessarily  of  the  people  at  the  absolute 
top  of  the  firm.   But  it  ought  to  be  composed  of  senior  partners  who 
had  put  in  their  time,  who  had  shown  they  were  people  of  this  kind 
who  believed  in  the  principles  of  the  culture  that  we  have.   If  you 
take  on  someone  who's  only  been  made  a  partner  a  couple  of  years, 
you  have  no  idea  what  he  will  want  to  do.   It's  like  when  you 
appoint  somebody  to  the  Supreme  Court  of  the  United  States  --  you 
may  think  you're  appointing  a  conservative  and  he  turns  out  to  be  a 
raving,  tearing  liberal  when  he's  got  a  life  appointment  [hearty 
laughter  from  both],  and  vice  versa.   So,  I  think  that's  about  all 
that  I  have  to  say  about  that. 


Intel ' s  Public  Offering:   An  Aside 


Hicke: 

McBaine: 
Hicke: 

McBaine: 


Okay, 
all? 

Yes. 


Just  incidentally,  were  you  in  on  the  formation  of  Intel  at 


I  wanted  to  ask  you  a  little  bit  about  that,  and  also  something 
about  your  community  activities. 

I  can  tell  you  about  Intel  very  quickly.   I  don't  remember  whether 
it  was  Mr.  [Frank]  Roberts  or  Mr.  [Bruce]  Mann  who  spoke  to  me  about 
Intel,  but  we've  never  had  any  firm  program  about  investments  or 
anything  of  that  kind.  We  have  often  discussed  --  or  we  did  in  my 
time  --  whether  the  firm  should  seek  to  attract  clients  who  were  new 
ventures  and  do  work  for  them  on  a  noncash  basis.   That  is,  do  the 
work  and  then  be  paid  in  stock  which  might  or  might  not  be  worth 
anything.  There  was  always  a  wide  difference  of  opinion  on  that. 
Quite  why,  I  don't  know.   It  didn't  cause  any  real  difficulty  in  the 
firm,  but  there  were  enough  people  who  were  not  in  favor  of  it  so 
that  we  never  did  it. 

There  are  numerous  stories  of  law  firms  who  have  had  clients 
that  blossomed  into  an  IBM  or  something  of  that  kind,  and  people 
have  made  a  lot  of  money  by  being  in  at  the  beginning.   So  individu 
ally,  people  who  were  interested  in  that  sort  of  thing  would  talk 
about  it.   You  haven't  talked  to  Mr.  Roberts  yet,  have  you? 


179 
Hicke:    No. 

McBaine:   Well,  as  I  say,  I  can't  remember  whether  it  was  Roberts  or  Mann.   I 
know  that  Bruce  Mann  did  some  work  for  Intel,  and  I'm  pretty  sure  it 
was  Bruce  Mann  who  called  me  one  day  regarding  a  friend  or  friends 
in  Intel,  which  was,  as  you  know,  really  the  first  semiconductor 
company  in  Silicon  Valley  and  were  engaged  in  something  that  was 
absolutely  nonunderstandable  to  anybody  outside.   [chuckles]. 

Hicke:    Microchips. 

McBaine:   Yes,  microchips  and  all  that.   The  owners  who  started  these  com 
panies  got  money  from  the  venture  capitalists  and  authorized  a  mil 
lion  shares.   But  they  weren't  making  any  money  and  they  hadn't  gone 
public  yet,  so  they  were  struggling  to  keep  the  business  going. 
They  didn't  have  any  income,  no  cash  flow.   They  had  to  live  some 
place  and  supply  the  groceries  to  their  families. 

Hicke:    Starting  in  their  garage  -- 

McBaine:   Yes  [both  chuckle],  it  was  almost  the  garage  stage,  not  quite.   So 
anyway,  they  said  they  wanted  to  raise  some  money  and  would  some  of 
us  be  interested  in  buying  shares  at  so  many  dollars  a  share,  what 
ever  it  was. 

Hicke:    Would  the  firm  be  interested? 

McBaine:   No,  no.   Just  individuals.   I  don't  think  that  the  proposition  was 

made  to  the  firm,  because  previously  when  we  had  discussed  this  sort 
of  thing  there  wasn't  enough  unanimity  of  opinion  for  the  firm  to  do 
it.   People  didn't  want  to  do  it,  so  it  sort  of  broke  into  individ 
uals  doing  it. 

Hicke:    So  he  would  just  call  on  various  individuals  and  ask  them? 

McBaine:   That's  right,  and  there  were  five  or  six  of  us,  as  I  remember  it, 
that  put  up  some  money.   Of  course,  it  turned  out  very  well,  and 
we've  also  been  counsel  for  Intel  for  years.   We  still  are,  as  far 
as  I  know.   I  think  they  have  their  own  legal  staff,  general 
counsel;  as  I  say,  in  some  matters  I  think  we've  still  represented 
them. 

Hicke:     PM&S  represented  them  when  they  went  public,  is  that  correct? 

McBaine:   I  can't  tell  you  whether  we  represented  Intel,  who  was  the  issuer, 
or  Hambrecht  &  Quist,  who  I  believe  was  the  underwriter.   Different 
people  represent  the  issuer  and  the  underwriter.   Now,  Hambrecht  & 
Quist  is  a  client  of  our  firm's  and  has  been  since  the  early  days. 
I  don't  know  if  you've  talked  to  anybody  about  that. 

Hicke:    No,  nobody  has  ever  told  me  about  that. 
McBaine:   Someday  you  ought  to  do  a  story  about  them. 


180 
Hicke:    Yes.   Do  you  have  time  to  tell  me  a  little  bit  about  that? 

McBaine:  Well,  yes.   Hambrecht  &  Quist  was  started  by  two  local  young  men. 
One  of  them,  Quist,  was  the  head  of  the  small  business  investment 
company,  whatever  the  exact  name  of  it  was,  of  the  Bank  of  America. 
I  don't  know  whether  Bill  Hambrecht  had  any  investment  background. 
He  was  a  stockbroker.   I'm  not  quite  sure  of  his  previous  back 
ground.   They  formed  this  firm  and  really  set  out  to  be  and  became 
investment  bankers  for  Silicon  Valley.   They  became,  in  a  very  short 
time,  a  very  few  years,  one  of  the  leading  investment  banking  firms 
in  the  country,  starting  from  scratch,  very  much  like  some  of  the 
Silicon  Valley  companies. 

At  that  time,  Al  Brown  was  our  senior  securities  lawyer,  but 
Bruce  Mann  was  the  next  senior  and  also  very  active  in  getting 
around  the  community.   My  younger  son  had  joined  Hambrecht  &  Quist 
some  years  previously  --  I've  forgotten  exactly  when  it  was  --  and 
is  still  there.   I  met  Hambrecht  through  him.   I  didn't  know  him 
well,  but  I  knew  him  because  of  my  son  Pat's  employment  there.   I 
had  nothing  to  do  with  attracting  their  business,  I'm  sure,  but  in 
any  case,  Hambrecht  called  me  up  one  day  and  said  he  would  like  to 
see  me.   He  came  over  to  see  me  and  said  that  he  would  like  to 
retain  Pillsbury,  Madison  &  Sutro  as  counsel  on  some  of  these 
things:   maybe  it  was  the  Intel  registration  statement;  I  don't 
remember  that  now.   I,  of  course,  referred  him  to  our  securities 
boys  and  he  did  retain  them  and  still  does  to  this  day. 

In  the  beginning  and  for  a  long  time,  I  think  we  did  virtually 
every  underwriting  they  did.   One  year  --  I've  forgotten  what  year 
it  was,  sometime  in  the  '80s  --  they  had  more  initial  public  offer 
ings  than  any  investment  banking  firm  in  the  country.   I'm  not  sure 
it  was  the  biggest  in  volume,  but  it  did  the  largest  number  of  them. 
So  they've  been  remarkably  successful  and  we've  been  their  attorneys 
ever  since  the  very  early  days. 

Dean  Witter  &  Co.  and  Blyth  &  Co.  --  while  they  haven't  disap 
peared  from  the  scene,  they  are  no  longer  local  companies.   Ham 
brecht  &  Quist,  and  there  are  several  others,  have  sort  of  taken 
their  place.   So  the  economy  is  dynamic.   [chuckles] 


Community  Activities 

[Interview  continued:   August  6,  1986 


Hicke:    The  next  thing  I  want  to  ask  about  is  community  activities. 

McBaine:  That's  another  difficult  subject,  and  it  has  varied  at  times  in  the 
firm.   Different  people  come  and  go,  I  mean  who  are  senior  in  the 
firm,  and  therefore  they  may  have  slightly  different  ideas.   It's  a 
very  difficult  question  as  to  how  much  community  activities  should 


181 

be  taken  on.  Normally  speaking,  younger  lawyers  go  out  and  get 
involved  in  community  activities.   If  they  are  on  their  own  or  are 
in  a  firm  of  younger  lawyers  without  an  established  client  base, 
obviously  the  pressure  is  on  many  of  them  to  engage  in  community 
activities,  because  it's  a  way  of  getting  to  know  people  in  the  com 
munity  and  bringing  themselves  to  the  attention  of  people  in  the 
community,  hopefully  making  a  favorable  impression  and  advancing 
their  professional  careers. 

But  when  a  young  lawyer  comes  into  a  firm  like  Pillsbury, 
Madison  &  Sutro,  our  client  base  is  such,  and  has  been  for  many 
years,  that  the  young  lawyer  feels  almost  no  pressure  at  all  to  go 
out  and  get  new  business,  because  usually  he's  so  busy  trying  to 
take  care  of  the  jobs  that  are  assigned  to  him  by  the  older  partners 
from  our  existing  client  base  that  he  doesn't  feel  any  need  to  go 
out  and  involve  himself  in  the  outside  world. 

There's  a  danger  in  that,  because  you  can  get  too  many 
8:30-to-5  lawyers,  if  you  will,  who  live  all  over  the  Bay  Area,  in 
various  communities  in  the  Bay  Area.   I  don't  know  what  the  per 
centage  is  who  live  in  San  Francisco  now,  but  it's  really  not  much 
higher  than  the  percentage  that  lives  in  Marin  County  or  the  East 
Bay  or  San  Mateo  County,  and  if  all  the  lawyers  in  the  office  simply 
come  to  the  office  and  work  from  8:30  to  5:30  five  days  a  week,  or 
even  six,  and  go  home,  that's  not  going  to  be  good  for  the  firm. 

On  the  other  hand,  there's  a  fine  line  to  be  drawn  here, 
because  some  outgoing,  gregarious  people  may  get  so  interested  in 
civic  activities  that  their  partners  and  associates  are  going  to 
feel  that  they're  just  having  a  good  time  and  not  really  pulling 
their  share  of  the  load  in  the  office.   So  there's  a  fine  line  to  be 
drawn  here.   It's  not  always  easy  to  do  it  and  it  has  different 
results  in  different  cases. 

I've  sort  of  had  the  feeling,  the  final  few  years  of  my  active 
participation  in  the  firm  management,  that  economic  pressure  really 
had  been  put  on  our  lawyers  too  much  by  some  of  the  seniors  who  were 
over-concerned  with  chargeable  time  and  the  economic  results  of  the 
firm,  and  that  we  didn't  have  enough  people  doing  enough  community 
service  jobs.   It's  the  kind  of  thing  that  would  be  very  difficult 
to  take  a  vote  on,  and  I  don't  think  any  such  vote  has  been  taken, 
but  it  is  a  question  that  concerns  the  seniors  in  the  firm  who  are 
responsible  for  the  firm  management. 

Again,  this  thing  is  without  much  specific  planning.   I'm  not 
sure  that  any  lawyer  in  the  office  has  ever  been  asked  to  go  out  and 
do  some  specific  civic  thing  for  the  good  of  the  firm.   If  he  wants 
to  do  it  because  he  likes  to  do  it  and  he  knows  that  the  firm  gener 
ally  would  think  that  we  want  our  people  to  be  known  in  the  commu 
nity,  that's  fine,  but  I  don't  think  anybody's  ever  said,  "You've 
got  to  go  do  so  and  so." 


182 


Hicke: 
McBaine: 


Hicke: 


McBaine: 


Hicke: 
McBaine: 


Again,  we  haven't  been  very  scientific  about  all  this.   I  think 
it's  one  place  where  perhaps  we  could  do  better. 

So  do  you  leave  it  up  to  the  individual  lawyer? 

Pretty  much,  yes,  it  has  been.  There  may  be  general  talks  of  the 
kind  I'm  giving  just  now  [chuckles],  made  to  people  that  they  ought 
not  to  simply  come  into  the  office  at  8:30  in  the  morning  and  go 
home  at  5:30  in  the  afternoon,  so  that  nobody  even  hears  or  sees  of 
them  after  that  except  their  immediate  family  and  neighbors,  let's 
say.   It  would  be  pretty  hard  to  maintain  a  great  law  firm  like  this 
if  everybody  did  that.   Some  people  have  got  to  do  some  activities. 
That's  about  as  far,  I  think,  as  we've  ever  gone:   to  make  a  few  pep 
talks  like  that. 

And  certainly  examples  are  set,  so  that  younger  partners  and  associ 
ates  can  see  the  kind  of  thing  that  the  senior  partners  do. 

Yes.   Correct.   And  the  senior  partners  are  quite  different  in  that 
regard  too.   Some  are  much  more  active  than  others  are.   But  I  would 
say,  during  my  time  in  the  firm  I  think  we've  been  perhaps  about 
average  in  community  activities.   I'm  not  sure  that  we've  been  out 
standing. 

I'm  not  talking  about  pro  bono  legal  activities.   We,  like  most 
other  firms  today,  do  have  more  or  less  a  program  for  pro  bono 
activities,  at  no  charge.   But  it  all  depends  on  how  you  define  pro 
bono  activities.   For  example,  I  think  ever  since  it  was  founded  we 
have  done  the  legal  work,  including  until  fairly  recently  all  the 
labor  negotiation  work,  for  the  San  Francisco  Opera  Company.   That's 
gone  on  for  many  years,  and  I  don't  know  how  many  hours  have  been 
involved  in  that.   Now  so  far  as  I'm  concerned,  that  is  pro  bono 
publico  work.   I  don't  suppose  Ralph  Nader  would  call  that  pro  bono 
publico,  and  some  of  these  liberal  young  lawyers  who  really  want  to 
reform  society,  as  some  of  the  public  interest  law  groups  would  want 
to  do,  would  not  call  that  pro  bono  publico;  I  do. 

That  simply  means  for  the  good  of  the  public. 

For  the  good  of  the  public.   I  think  supporting  and  helping  the  arts 
is  for  the  good  of  the  public.   It  doesn't  always  have  to  be  some 
oppressed  minority  or  something  of  that  kind,  although  we've  done 
plenty  of  that  kind  of  thing  as  well.   We've  done  things  like  the 
opera  long  before  it  became  fashionable  to  be  doing  pro  bono  publico 
work.  We  still  send  a  young  lawyer  at  our  expense  out  to  the  Public 
Defender's  office.   He's  on  our  payroll.   He  does  a  six-month  stint, 
I  believe  it  is,  in  the  Public  Defender's  office,  assisting  the 
Public  Defender,  who  is  swamped  and  doesn't  have  enough  lawyers. 

We  take  pro  bono  publico  cases.   I  know  we've  had  several  which 
have  involved  prison  conditions,  allegedly  harsh  and  unreasonable 
prison  conditions.   That  kind  of  activity  goes  on  all  the  time.   Our 
lawyers  have  participated  in  that  for  a  long,  long  time;  we  partici- 


Hicke: 


McBaine: 


183 

pated  in  it  long  before  the  federal  government  got  involved  in  it 
through  subventions  to  these  local  groups. 

Now,  you've  asked  about  my  community  activities.  The  World 
Affairs  Council  of  Northern  California,  I  guess,  was  one  of  the  ear 
liest  that  I  participated  in.  When  I  came  back  to  San  Francisco  in 
1947,  I  almost  immediately  joined  the  World  Affairs  Council  and  was 
active  in  it. 

How  did  you  get  interested  in  that?  Obviously  you  had  a  lot  of 
international  experience. 

From  my  time  in  college  on,  I  had  always  been  interested  in  world 
affairs,  never  in  any  specific  or  serious  way,  but  certainly  aware 
and  interested  in  all  that  was  going  on.   Then  as  a  result  of  my 
wartime  experience  in  the  O.S.S.  all  during  the  four  and  a  half 
years,  being  all  through  the  Middle  East  and  in  all  the  Middle 
Eastern  countries,  then  in  the  Far  East  in  all  the  Far  Eastern  coun 
tries,  I  was  acutely  aware  of  the  conflict  between  the  Nazis  and  the 
Fascists  and  the  Chinese  Communists  and  the  Western  world.   It  was 
just  sort  of  a  natural  thing. 

I  was  on  the  board  of  directors  of  that  for  many  years.   I 
remember  one  of  the  most  interesting  things  that  we  did:   we  had 
section  meetings  at  that  time.   I've  forgotten  how  many  groups  there 
were  and  just  how  they  were  set  up;  I  think  they  were  each  devoted 
to  a  particular  subject,  that  is,  a  particular  area.   People  would 
sign  up  for  one  and  then  the  section  leader,  which  I  was  for  several 
years,  would  assign  a  subject  to  a  given  member  of  the  group.   We'd 
meet,  let's  say,  every  two  weeks,  and  somebody  would  have,  let's 
say,  six  weeks  to  prepare  a  paper  on  a  given  subject  and  then  would 
have  to  come  in  and  read  the  paper  to  the  group  and  then  have  a  dis 
cussion  with  the  members  of  the  group.   It  was  interesting  because 
this  is  the  kind  of  thing  you  expect  to  do  in  college,  and  I  was 
still  in  my  30's  then,  I  guess. 

I  remember  that  we  had  one  woman  that  was  a  good  friend  of 
mine,  a  most  admirable  woman,  she  must  have  been  in  her  late  60 's 
then,  I  guess,  and  she  was  sort  of  a  pillar  of  the  community  and  a 
great  supporter  of  the  World  Affairs  Council.   She  enjoyed  this  sort 
of  thing  immensely;  she  had  a  good  mind.   She  signed  up  for  some 
section  of  which  I  was  the  leader. 

At  the  first  meeting  or  so  I  assigned  the  paper  to  her;  I  had 
the  termerity  [chuckles  deeply]  to  say,  "Mrs.  So-and-So,  you  prepare 
the  next  paper."  She  said,  "Oh,  no,  I  can't  do  anything  like  that," 
and  I  said  "Of  course  you  can."  She  was  very  uncertain  about  the 
whole  idea,  very  upset  about  it.   She  didn't  expect  to  be  called  on 
to  do  anything,  she'd  been  so  much  the  grande  dame  of  the  place.   I 
kept  the  heat  on  her,  and  I'm  not  sure  that  she  did  it  in  time,  but 
eventually  she  did  do  it  [chuckles],  and  once  she  did  it,  she  really 
enjoyed  it.   She  had  a  very  good  time  out  of  it. 


184 

It  does  serve  a  useful  purpose,  this  World  Affairs  Council. 
There  are  World  Affairs  Councils  in  cities  all  over  the  country,  you 
may  know,  and  they  bring  to  a  local  community  a  kind  of  information 
that  doesn't  really  get  to  them  much  in  any  other  way.   Of  course, 
it's  changing  year  by  year.   As  the  years  go  along,  more  Americans 
become  more  sophisticated  about  foreign  affairs.   Forty  years  or  so 
ago  there  were  a  lot  of  Americans  who  weren't  very  sophisticated 
about  foreign  affairs.  That  means  they  were  easily  taken  in  by  for 
eign  propaganda.   Almost  all  Americans  seem  to  think  that  everybody 
in  the  world  is  good,  basically.   I'm  not  saying  that  everybody  in 
the  world  is  basically  bad,  but  I  think  there  are  an  awful  lot  of 
people  that  are  basically  bad.   [chuckles) 

Hicke:    America  has  something  of  an  idealistic  outlook. 

McBaine:   That's  right.   They  really  do.   And  the  World  Affairs  Council  was 
not  only  interesting,  but  I  think  it  seemed  worthwhile  because  it 
did  make  us  more  sophisticated  about  current  world  affairs  and 
better  able  to  judge  them. 

Now  we  were  talking  about  community  activities  in  the  firm.   I 
wasn't  even  a  partner  yet  when  I  joined  the  World  Affairs  Council. 
I  didn't  do  that  because  somebody  told  me  it  would  be  good  for  the 
firm  if  I  did  it.   I  did  it  just  because  I  was  interested  myself.   I 
didn't  do  it  to  such  an  extent  that  it  interfered  with  my  duties  at 
the  firm.   What  the  seniors  in  the  firm  thought  about  it,  I  really 
had  no  idea. 

Hicke:    They  knew  you  were  in  it? 

McBaine:   Some  of  them  did  and  some  of  them  didn't,  I  would  guess.   But  we  do 
try  to  encourage  lawyers  to  have  enough  self-initiative  to  do  some 
thing;  it  doesn't  make  any  difference  what  it  is,  whether  it's  a 
charitable  organization,  Red  Cross  if  you  will,  or  the  California 
Academy  of  Sciences,  or  what  it  is,  but  something.   I  think  that's  a 
little  broader  than  just  being  in  a  law  firm;  it's  being  a  good 
citizen.   Everyone  should  do  something. 

Another  thing  that  I  got  involved  in  which  has  been  the  prin 
cipal  outside  activity  I've  been  involved  in  for  many,  many  years  is 
the  Asia  Foundation.   I  got  involved  in  that  about  1955  because  of  a 
close  friend  and  associate  of  mine  in  O.S.S.  during  the  war  years. 
Some  of  the  people  in  O.S.S.  got  the  idea  of  organizing  on  the  West 
Coast  --  and  picked  San  Francisco  --  an  organization  that  would  be 
comparable  to  Radio  Free  Europe. 

This  organization  was  to  be  composed  of  private  citizens  who 
would  be  the  directors  of  a  nonprofit  California  corporation,  which 
would  be  financed  by  the  C.I. A.  --  I  said  O.S.S.,  but  by  now  it  was 
the  C.I. A.  --  to  do  two  things:   one,  to  create  a  radio  station  for 
broadcast  into  Asia,  because  mainland  China  was  communist-dominated 
by  this  time,  and  second,  to  select  and  send  to  the  various  coun 
tries  of  Asia  which  were  not  -- 


185 


a 

McBaine:   --  already  communist-dominated  representatives  of  the  foundation, 
whose  job  it  was  to  contact  local  citizens  and  to  encourage  and 
assist  indigenous  groups  whose  point  of  view  was  to  support  nonto- 
talitarian  and  nondictatorial  forms  of  government.   Now  it's  impor 
tant  that  at  no  time  was  the  organization  or  its  representatives 
ever  to  engage  in  any  kind  of  espionage  or  any  kind  of  subversion. 
That  was  not  the  purpose  of  this  group  at  any  time.   Although  it  was 
generated  by  and  financed  by  the  C.I. A.,  it  was  completely  con 
trolled  by  the  San  Francisco  directors  of  the  organization  and  it 
had  no  covert  or  subversive  purposes  or  activities. 

The  amount  of  money  was  not  very  large  and  so,  in  contrast  to 
A.I.D.  [Agency  for  International  Development],  the  U.S.  foreign  aid 
administration,  we  didn't  deal  in  millions  of  dollars,  we  dealt  in 
what  might  almost  be  called  seed  money.   It  varied  from  country  to 
country  as  to  who  these  groups  might  be.   The  Boy  Scouts,  for 
example,  was  considered  to  be  an  organization  which  was  worth  sup 
port  because  that  was  really  contrary  to  a  totalitarian  point  of 
view  to  have  an  organization  anything  like  Boy  Scouts.   They  taught 
them  to  be  independent  and  taught  values  that  were  nontotalitarian. 

Hicke:    These  were  Boy  Scouts  organizations  in  Asia? 

McBaine:   In  Asian  countries,  that's  right.   That's  just  an  example. 

One  of  the  examples  of  the  things  we  did  in  the  very  early 
days,  the  most  dramatic,  was  during  the  war  in  Korea.   You  may 
remember  the  North  Koreans  at  one  time  swept  down  into  the  South  and 
went  almost  all  the  way,  almost  drove  the  South  Koreans  and  the 
Americans  out  into  the  ocean.   Then  MacArthur's  forces  pushed  them 
back  north  again,  back  to  the  borderline  between  North  and  South 
Korea. 

When  the  communists  swept  south,  they  systematically  destroyed 
every  school  book  in  every  school  in  South  Korea  and  printed  books 
with  the  communist  line  to  stock  all  the  schools.   When,  a  few 
months  later,  MacArthur's  army  swept  back  north  again,  there  wasn't 
a  primary  school  in  all  of  South  Korea  that  had  anything  except  the 
communist  textbooks. 

Well,  the  Asia  Foundation  was  organized,  as  I  say,  at  the 
request  of  the  C.I. A.,  and  the  official  in  the  C.I. A.,  as  I  say,  was 
a  wartime  friend  and  associate  of  mine  in  O.S.S.,  and  he  got  hold  of 
me  on  a  personal  friendship  basis. 

Hicke:    Can  you  tell  me  who  he  was? 

McBaine:   Well,  I  don't  suppose  there's  any  reason  why  I  shouldn't.   His  name 
was  Frank  Wisner.   This  became  well  known.   I  don't  want  to  publi 
cize  this,  because  some  people  always  have  been  suspicious  of  what  I 
say  when  I  say  there  were  no  espionage  or  covert  activities  involved 
in  this.   There  were  not,  because  I  was  in  it  from  day  one. 


Hicke: 
McBaine: 


In  any  case,  three  individuals  were  selected  here  besides 
myself.   One  was  Brayton  Wilbur,  Sr.,  one  was  Charles  R.  Blyth  of 
Blyth  and  Company,  and  one  was  David  Zellerbach,  who  was  then  the 
senior  member  of  the  Zellerbach  family  and  head  of  the  Zellerbach 
Paper  companies.  These  were  three,  I  would  say,  of  the  top  leaders 
in  San  Francisco.   And  the  only  reason  that  I  participated  in  that 
elevated  group  was,  as  I  say  [chuckles],  because  of  my  background  in 
O.S.S.  and  because  of  knowing  Frank  Wisner.   I  did  the  work  and 
organized  the  corporation,  and  I  was  the  secretary  of  it  for  many 
years,  as  well  as  a  member  of  the  Board  of  Trustees. 

But  to  go  back  to  Korea  now:   as  I  say,  they  were  left  with  no 
textbooks.   We  had  a  representative  in  Korea;  and  we  sent  someone 
out  there  to  find  out  about  this  whole  situation  and  uncover  what 
had  happened.  When  he  returned  we  got  together  and  Dave  Zellerbach, 
who  was  in  the  paper  business,  got  us  --  and  I  don't  remember 
whether  it  was  a  gift  or  whether  we  paid  cut-rate  for  it  --  reams  or 
rolls  of  newsprint,  which  is  printable  paper  but  is  pretty  cheap 
paper.   Brayton  Wilbur,  who  was  in  the  export/import  business  and 
knew  all  the  shipping  lines,  got  the  ships  for  us.   We  got  a  man  in 
the  State  Department  who  spoke  Korean  as  well  as  English  on  loan 
from  the  State  Department,  so  that  we  could  send  him  out  there  and 
make  sure  we  would  not  be  duped  into  printing  up  a  lot  of  textbooks 
that  said  something  that  we  were  not  expecting  to  be  said, 
[chuckles]   We  got  some  printing  presses  someplace;  I  don't  remember 
whether  they  were  in  Korea  or  we  had  to  ship  them  there.   Within  a 
matter  of  two  months  or  three  months,  in  a  remarkably  short  time,  we 
had  thousands  of  primary  school  textbooks  on  basic  subjects  in 
printed  Korean  and  distributed  in  the  Korean  schools. 

Now  any  governmental  organization  that  had  tried  to  do  that 
would  have  been  lucky  to  do  it  in  five  years,  which  was  a  perfect 
demonstration  of  the  reason  why  this  organization  was  created  the 
way  it  was:   run  by  private  citizens  with  really  no  interference 
from  the  government  --  the  C.I. A.   They  supplied  our  yearly  funds, 
and  in  the  last  analysis,  of  course,  if  we  had  done  something  that 
they  didn't  approve  of,  I  guess  they  could  have  cut  off  the  funds. 
But  they  never  did,  and  the  agreement  between  this  local  group  and 
the  C.I. A.  was  that  we  were  going  to,  as  I  say,  encourage  noncommu- 
nist  indigenous  elements. 

Other  than  that  they  just  left  you  a  free  hand? 


They  just  left  us  a  free  hand. 


Now  sometime  later  --  I've  forgotten  how  much  later  it  was  -- 
it  was  revealed  that  the  C.I. A.  had  organized  numerous  organizations 
of  various  kinds  throughout  the  United  States  and  one  was  called 
Student  Affairs,  or  something  like  that,  some  student  organization; 
I've  forgotten  exactly  what  it  was  called.   This  held  itself  out  as 
being  an  independent  student  organization  with  no  connection  or  any 
thing  to  the  government.   They  were  engaged  in  public  meetings  that 
had  annual  conventions,  made  speeches,  and  attempted  to  --  and  I 


Hicke: 
McBaine: 


187 

guess  they  did  --  influence  legislation  and  the  course  of  the 
country.   It  was  revealed  suddenly  that  the  C.I. A.  was  putting  up 
the  money  for  this  thing.  Well,  there  was  a  terrific  uproar  about 
this,  which  you  can  well  imagine. 

I  should  specify  that  the  Asia  Foundation  did  nothing  in  the 
United  States,  absolutely  nothing.   We  later  printed  a  newspaper 
which  was  distributed  to  Asian  students  in  the  United  States.   It 
was  mostly  editorials  and  articles  from  Asian  newspapers,  sort  of 
keeping  them  in  touch  with  home.   But  that's  the  only  thing  that 
we'd  ever  done  in  the  United  States.  We  help  place  Asian  scholars 
in  the  various  universities  in  the  United  States,  but  nearly  all  our 
activities  are  in  the  Asian  countries. 

So  over  the  years,  it  has  had  a  remarkably  successful  time. 
The  big  reason  for  that  was,  as  I  say,  that  the  people  that  we  sent 
out  as  representatives  were  selected  and  trained  as  people  with  a 
passion  for  anonymity,  to  use  a  phrase  that  Mr.  Roosevelt  was  fond 
of.   He  used  to  say  that  the  assistants  he  wanted  in  the  White  House 
should  be  people  with  a  passion  for  anonymity.   Most  of  our  repre 
sentatives  have  been  at  one  time  academics,  and  they  have  done  a 
fantastic  job.   Most  of  them  are  very  sincere  people,  most  of  them 
know  the  countries  where  they  are,  many  of  them  know  the  language 
where  they're  stationed. 

We  only  have  two  or  three  people  in  any  one  country;  we  don't 
have  big  staffs,  just  a  few  local  secretaries.   They  get  to  know  the 
community,  know  the  people  in  it,  know  the  local  organizations  in 
it,  and,  as  I  say,  try  to  encourage  the  ones  who  will  be  helpful  in 
maintaining  the  freedom  of  the  people  as  against  any  kind  of  a 
totalitarian  state.   That's  expressed  in  the  broadest  possible  terms 
and  that's  the  basic  idea  of  this  thing. 

This  is  not  public  and  I  don't  want  all  of  this  to  get  to  the 
media  right  now.   The  Asia  Foundation  is  still  going  strong  and 
they're  really  a  long  ways  from  where  they  were  in  those  days.   It's 
more  of  a  philanthropic  organization  purely  now  than  it  was  in  those 
days . 

What  about  the  student  group  that  was  backed  by  the  C.I. A? 

Yes.   I  started  to  tell  you  about  that.   There  was  a  hullabaloo 
about  that,  which  I  can  well  understand.   [Lyndon  B.]  Johnson  was 
president  at  that  time,  so  Johnson,  I  think,  panicked  and  he  simply 
announced,  without  knowing  what  he  was  doing  --  I  doubt  if  he  even 
got  a  list  from  the  C.I. A.  of  things  they  were  doing  --  but  he  sud 
denly  issued  a  Presidential  Order  that  no  U.S.  Government  funds 
would  go  to  any  outside  organization;  he  just  cut  them  all  off. 

I  doubt  very  much  if  he  knew  what  the  Asia  Foundation  was  or 
what  it  did.   He  just  reacted  politically  because  there  was  such  a 
hubbub  about  the  student  organization  that  he  had  to  be  able  to  get 
up  and  say,  "We're  not  giving  anybody  anything."  You  know,  Ameri- 


188 

cans  are  very  touchy  about  the  government  subventions  of  anybody  in 
private  life.  They're  always  talking  about  it,  like  the  time  they 
found  out  that  the  government  paid  some  Harvard  professor  to  write  a 
book  about  something.   Someone  can  give  a  scholarship  or  a  MacArthur 
grant  or  something  like  that  and  it's  okay,  but  when  the  government 
does  it,  the  media  immediately  goes  into  orbit. 

These  Foundation  representatives,  as  I  say,  have  a  remarkable 
record  and  over  the  years  created  a  remarkable  acceptance.   Among 
other  things,  they  were  accepted  by  the  State  Department  in  every 
country  in  which  they  worked.   As  Americans  in  an  American  organiza 
tion,  of  course,  they  have  reported  to  the  local  ambassador;  they 
certainly  kept  the  local  ambassador  informed  of  their  purpose  and 
activities.   How  many  reports  they  had  to  make  in  detail,  I  don't 
know  --  it  may  vary  from  place  to  place  --  but  they  had  to  have  the 
ambassador's  approval  everyplace,  otherwise  they'd  be  sent  home. 
Over  the  years  the  ambassadorial  corps  became  one  of  the  founda 
tion's  biggest  supporters. 

After  Johnson  cut  off  the  government  funds  this  way,  there  was 
a  period  there  where  the  question  was  what  was  the  foundation  going 
to  do?   Ultimately,  Congress  passed  an  act,  called  the  Asia  Founda 
tion  Act,  in  which  they  recognized  the  work  that  the  foundation  has 
done  over  the  years,  because  it's  the  most  influential  Western  orga 
nization  in  these  Asian  countries  that  there  is.   The  Ford  Founda 
tion  has  given  up  and  gone  home  in  almost  every  one  of  them.   I 
don't  know  of  any  other  foundation  that's  really  active  in  any  of 
the  Asian  countries.   The  missionaries  went  home,  almost  all  of 
them.   They  went  certainly  out  of  Red  China. 

The  Asia  Foundation  has  done  an  enormously  important  job  and 
done  it  superbly  well.   Our  representatives  in  various  countries 
have  received  all  sorts  of  honors  and  medals  from  the  various  local 
governments.   Of  course,  sometimes  we  go  in  and  out.  There  ve  been 
periods  when  we've  been  in  India  and  there 're  periods  when  the  gov 
ernment  of  India  says,  "No,  you  can't  be  in  India."  That's  been 
true  in  some  other  countries.   In  some  other  countries  we've  been 
accepted  and  worked  there  because,  as  I  say,  we're  not  subversive  in 
any  way  and  we're  encouraging  local  organizations  which  do  exist 
according  to  the  law  of  the  local  country. 

It's  been  an  interesting  thing.   I'm  no  longer  active  in  it; 
I'm  a  trustee  emeritus  now,  since  either  last  year  or  the  beginning 
of  this  year,  anyway,  within  the  last  year.   That  I  did  for  quite  a 
long  time. 

Hicke:    Where  does  the  funding  come  from  now? 

McBaine:   From  Congress. 

Hicke:    Oh,  that's  what  the  Act  was? 


189 

McBaine:   Yes.   You  see,  the  psychology  of  this  thing  has  a  lot  to  do  with  it. 
If  the  money  comes  from  Congress,  nobody  particularly  thinks  that's 
dirty  money.   But  if  you  say  the  money  comes  from  the  C.I. A.,  there 
are  going  to  be  a  certain  number  of  people  who  immediately  say: 
"Oh,  that's  dirty  money."  In  our  case,  it's  exactly  the  same.   It's 
government  money  and  all  the  governments  in  Asia,  I'm  sure,  knew 
that  this  was  government  money,  but  there  were  many  Asian  govern 
ments  who  could  deal  with  a  private  organization  like  the  Asia  Foun 
dation,  American  though  it  was,  who  could  not  because  of  local  poli 
tics  deal  with  an  American  government  organization.  That  would  be 
either  demeaning  to  them  or  impossible  politically.  While  this  was 
not  publicized,  it  really  couldn't  very  well  be  kept  secret. 

So  it  was  a  very  interesting  thing.   It's  been  one  of  the  most 
successful  international  organizations  that  I  know  of.   Because,  you 
see,  if  A.I.D.  supplied  some  materials  to  somebody,  the  package 
would  come  with  an  American  flag  on  it,  often  in  order  to  prevent 
the  local  communists  from  getting  hold  of  the  crates  first  and 
stamping  a  hammer  and  sickle  on  them.   [both  laugh]  Well,  it's 
often  done.   But  we  never  did  that,  you  see.   We  didn't  put  American 
flags  on  anything.   We  dealt  with  a  local  group  and  they  got  all  the 
credit.   It  wasn't  our  man  who  got  the  credit  for  providing  this, 
that,  and  the  other  thing,  or  starting  this  or  stimulating  it.   It 
was  the  local  leaders  of  whatever  group  we  were  working  with  who  got 
the  credit.   Therefore  they  all  liked  to  work  with  us.   It  was  sort 
of  the  antithesis  of  the  "ugly  American"  most  people  have  in  mind. 

It  was  really  a  fascinating  thing  to  do  and,  I  think,  has  done 
a  tremendous  amount  of  good  over  the  years. 

McBaine:   We  had,  for  example,  just  to  continue  with  this,  a  representative  in 
Afghanistan  for  many  years,  in  Kabul.   He  was  a  retired  textile 
manufacturer  from  New  England.   He'd  retired  at  a  fairly  early  age, 
and  went  out  there  for  a  short  period  of  time  and  got  interested  in 
the  project.   He  stayed  for  a  long  time,  I  think  perhaps  as  much  as 
ten  years,  and  became  a  very  important  man  in  that  community  there. 
He'd  been  there  such  a  long  time  and  was  always  perfectly  straight 
forward.   He  had  dealt  with  all  of  the  local  people  in  complete  hon 
esty  and  truthfulness  and  straightforwardness,  had  no  ax  to  grind 
except  their  own  advancement,  which  they  became  convinced  of.   He 
didn't  represent  any  government  so  he  didn't  represent  any  threat  to 
them  and  achieved  really  an  enormous  position.   Now  when  the  Rus 
sians  invaded  Afghanistan,  then  the  whole  thing  collapsed,  but  maybe 
if  the  Afghans  ever  get  their  country  back,  we  are  going  to  have  a 
representative  there  again. 

I  was  on  the  Bay  Area  Council,  a  local  organization,  mostly 
business  leaders,  and  it's  object  is  to  discuss  and  try  to  advance 
solutions  to  Bay  Area  problems,  rather  than  local  city  problems: 
city  of  San  Francisco,  or  city  of  Oakland,  or  city  of  Richmond,  or 
whatnot.   It's  headquartered  here  in  San  Francisco.   I  was  a  member 
of  that  council  for  a  number  of  years.   I  didn't  think  I  made  much 
of  a  contribution  to  it,  although  it  was  of  great  interest  to  me.   I 
think  I  got  more  out  of  it  than  I  put  into  it. 


Hicke: 

McBaine: 


190 

I  was  also  a  member  for  several  years  of  the  Industry  Education 
Council  of  California,  as  I  believe  it  was  called;  I'm  not  sure 
that's  the  exact  name.   It  was  a  group  of  people  from  all  over  the 
state,  again,  industry  leaders  mostly  and  some  lawyers,  I  suppose 
other  professional  men,  and  it  combined  industry  representatives 
with  educational  representatives.  For  example,  the  Superintendent 
of  Schools  for  the  State  of  California  would  be  there  at  the  major 
meetings,  and  the  representatives  of  the  teachers  unions  in 
California  would  be  at  the  meetings  and  would  discuss  the  problem  of 
education  in  California.   This  was  a  number  of  years  ago;  it  must 
have  been  fifteen  or  twenty  years  ago.   I  know  that  Wilson  Riles  was 
the  Superintendent  of  Public  Instruction  at  that  time,  a  really  very 
impressive  man,  I  thought.   I've  been  off  of  the  Council  for  at 
least  fifteen  years.   But  it  was  extremely  interesting  and,  again,  I 
thought  a  worthwhile  organization.   I've  forgotten  exactly  how  many 
years  I  was  on  it,  but  it  was  a  very  worthwhile  thing  to  do  and  I 
assume  it's  still  in  existence. 

What  about  bar  associations? 

I  never  was  active  in  the  American  Bar  [Association] .   I  was  active 
in  a  minor  way  in  the  Bar  Association  of  San  Francisco;  I  say  a 
minor  way:   I  was  a  director  of  the  Bar  Association  for  a  period  of 
years  and  I  was  also  the  chairman  of  the  Bar  Association  of  the  San 
Francisco  delegation  to  the  Conference  of  Delegates,  which  is  a  con 
ference  of  local  and  voluntary  bar  associations  held  each  year  in 
conjunction  with  the  State  Bar  convention.   That  was  interesting 
work  and  most  of  it  highly  controversial  --  well,  not  most  of  it, 
but  enough  of  it  so  that  [chuckles]  it  seemed  to  gather  most  of  the 
attention. 

I  was  also,  for  a  term  --  I've  forgotten  exactly  how  long  -- 
the  chairman  of  the  local  bar  association's  Committee  on  the  Judi 
ciary,  the  function  of  which  was  to  investigate  and  report  I  believe 
to  the  governor's  office  on  local  candidates  for  appointment  to  the 
Bench.  That's  a  very  important  function.   The  State  Bar  has  a 
similar  committee  for  the  state  level,  and  the  American  Bar  Associa 
tion  has  a  similar  committee  for  the  federal  level. 


McBaine:  Those  are,  of  course,  the  more  important  committees,  and  if  you've 
interviewed  Mr.  Sutro  you'll  know  that  he  is  an  ex-chairman  of  the 
ABA  committee  and  still  involves  himself  with  work  concerning  var 
ious  judges  and  so  forth. 

Hicke:    He  was  quite  interested  in  the  merit  selection  of  judges,  getting 
some  kind  of  legislation  on  it. 

McBaine:   Yes.   Legislation  on  it,  that's  right.   Yes,  that's  a  struggle 

that's  been  going  on  for  many,  many  years  in  different  states  all 
over  the  country.   Some  states  do  have  merit  selection  statutes  and 
other  states  resist. 


Hicke: 

McBaine; 


191 

I  was  a  trustee  of  the  World  Affairs  Council  in  Northern 
California  from  1948  to  '54.   I  was  a  trustee  of  the  Asia  Foundation 
beginning  in  1954.   I  was  a  member  of  the  Bay  Area  Council  from  1977 
to,  I  believe,  1980.   I  was  also  a  member  of  the  American  Judicature 
Society. 

What  does  that  do? 

That's  a  society  devoted  to  the  advancement  of  the  science  of  juris 
prudence.   I  was  not  very  active  in  it,  but  it's  generally  regarded 
as,  rather  than  a  political  lawyers  organization,  more  of  an  intel 
lectual  organization.   You  have  to  be  invited  to  join;  it's  not  open 
to  all  applicants.   I  didn't  really  do  much  serious  work  in  it,  but 
I  was  a  member  of  it  here  for  some  time. 


I  was  also  on  the  Board  of  Visitors  to  the  Stanford  Law  School 
from  1966  to  '69.   I  don't  know  if  I  mentioned  that. 


Hicke:    No. 

McBaine:   Well,  that  was  a  very  interesting  experience.   In  my  opinion,  all 

law  schools  would  benefit  to  have  such  a  thing.   The  board  of  visi 
tors  is  composed  of  about  forty-five  or  fifty  members,  I  guess. 
They're  not  all  from  Stanford  Law  School.   The  majority  of  them  are, 
or  maybe  two-thirds  are,  but  a  third  or  so  come  from  other  law 
schools,  and  they  serve  for  terms  of  I  believe  three  years. 

The  law  school  has  annual  sessions  of  two  days.   During  the 
first  day  and  into  the  second  day,  the  board  of  visitors  hears 
reports  from  everybody  in  the  law  school,  from  the  dean  of  the 
school,  the  dean  of  admissions,   various  members  of  the  faculty,  and 
from  the  heads  of  student  organizations  in  the  law  school.   A  com 
plete  presentation  is  made  to  the  board  of  visitors  of  everything 
about  the  school,  with  statistics,  how  many  applicants  they  had, 
where  they  come  from,  how  many  they  took,  what  their  admission  poli 
cies  are,  what  the  records  are  of  their  students  as  compared  to 
other  schools.   It's  the  most  complete  educational  course  you  can 
think  of. 

They  provide  luncheon  with  a  speaker  and  dinners  and  a  speaker, 
and  then  the  second  day  there's  another  luncheon,  and  I've  forgotten 
whether  there's  a  dinner  the  second  night  or  not,  but  at  any  rate  on 
the  second  day  the  board  of  visitors  goes  into  executive  session,  so 
to  speak.   They  have  a  couple  of  hours  or  so,  and  everybody  is  free 
to  make  speeches,  ask  questions,  and  debate  in  the  group  as  to  what 
their  comments  are  on  what  they  heard  and  whether  they  think  the  law 
school  is  doing  the  right  thing,  or  offer  suggestions  for  something 
else  they  might  do.   Then  there's  an  executive  committee  on  the 
board  of  visitors  which  is  supposed  to  write  a  report  to  the  school 
summing  up,  synthesizing  the  various  views  that  have  been  expressed 
in  this  executive  session. 


192 

Well,  the  first  year  I  went  there  and  went  through  all  of  this 
I  enjoyed  it  thoroughly,  but  I  kept  thinking  to  myself,  my  God, 
these  people  have  spent  all  this  time,  taking  all  their  time  away 
from  their  other  duties,  and  they've  given  us  all  this  tremendous, 
terribly  well-done  presentation,  and  any  contribution  that  I  can 
make,  or  that  we  the  board  of  visitors  can  make,  is  really  minuscule 
compared  to  all  this.   I  really  felt  sort  of  embarrassed  about  it. 

I  concluded,  after  thinking  about  it  a  little,  maybe  the  second 
year,  that  --  I  don't  mean  to  be  cynical  about  it,  but  I  think  one 
of  the  things  that  the  school  really  had  in  mind  in  doing  this  was 
the  public  relations  effect  of  it.   They  might  hope  to  get  something 
worthwhile  out  of  the  comments  of  the  board,  but  whether  they  did  or 
didn't,  the  fact  is  that  they  sent  forty-five  or  fifty  people  out  of 
there,  one-third  changing  every  year,  as  really  top-notch  boosters 
for  the  school.   They  made  me  a  booster  for  the  Stanford  Law  School, 
although  I  didn't  go  there.   I  thought  it  was  a  very  enjoyable  expe 
rience  and  highly  worthwhile.   I  hope  it  did  some  good  for  the 
school.   [both  chuckle) 

Hicke:    Well,  they  gathered  their  thoughts  together  anyway. 

McBaine:   Yes.   It  made  them  put  everything  together,  there's  no  question 

about  that;  that's  another  benefit  to  it.  Wallace  Sterling  was  the 
president  of  Stanford  at  that  time,  and  I  believe  the  invitation 
came  from  him.   He  was  a  friend  of  mine  and  I  remember  when  I  saw 
him  after  receiving  the  invitation  I  said  to  him,  "You  made  a  mis 
take.   You  must've  thought  I  graduated  from  Stanford  Law  School,  but 
I  didn't;  I  went  to  Cal."   [both  laugh]   And  he  said,  "No,  no,  I 
knew  that,  but  I  want  you  to  be  on  it  anyway."   So  I've  been  trying 
to  get  my  own  law  school  to  adopt  such  a  program;  they  haven't  done 
it  yet.   I  think  they're  mistaken  in  not  doing  it. 

Hicke:    I  wanted  to  ask  you  if  you  could  comment  on  something  that  inter 
ested  me,  which  is  why  a  law  firm  like  PM&S  is  not  publicly  held. 

McBaine:   In  the  first  place,  we're  a  partnership,  not  a  corporation,  and 

there's  no  legal  mechanism  by  which  the  public  can  own  a  partner 
ship.  The  partners  own  it  and  that's  the  nature  of  a  partnership. 
In  order  to  have  public  ownership  you'd  have  to  have  an  incorpora 
tion  and  issue  securities  and  sell  the  securities  to  the  public. 

Hicke:    But  then  that's  my  question.   Why  is  that  not  a  way  for  a  law  firm 
to  operate? 

McBaine:  Well,  it  might  be,  but  for  ourselves  --  I'm  just  giving  you  my  per 
sonal  reaction  --  in  the  first  place,  we've  never  needed  to  do  that. 
A  corporation  is  organized  and  it  has  a  business  and  it  has  a  busi 
ness  plan  and  ideas  of  something  owners  want  to  do,  something  they 
want  to  make.   They  need  capital  to  buy  the  machinery  and  rent  the 
premises  and  do  the  research  and  develop  the  thing  properly.   Unless 
their  creators  put  up  their  own  money  and  have  enough  of  it  to  do 
the  whole  thing,  they  have  to  go  to  the  financial  markets  to  get 
financial  backing. 


Hicke: 


McBaine: 


193 

Now  we've  never  been  in  that  position,  I  mean,  we  don't  need  . 
any  capital  over  and  above  what  we  generate  by  our  own  efforts.   We 
run  this  firm  based  on  what  we  get  from  our  clients,  and  it's  a  con 
tinuing  business.   The  only  reason  to  sell  securities  to  the  public 
would  be  to  raise  a  lot  of  money.  Then  the  partners,  who  would  get 
all  the  shares  if  we  incorporated,  could  then  sell  their  shares  to 
the  public  and  pocket  the  money.  Well,  that's  contrary  to  the  idea 
of  practicing  law  and  I'm  almost  positive  that  it  wouldn't  be  per 
mitted;  I'm  not  quite  sure  now  by  reason  of  what  law,  but  it's  con 
trary  to  the  basic  idea  of  a  legal  partnership  for  the  practice  of 
the  law.   In  other  words,  a  lawyer  has  a  duty  to  his  client,  and  I 
don't  think  he  should  be  able  to  dilute  that  by  selling  shares  to 
the  public  and  then  running  the  risk  of  tailoring  his  efforts  for 
his  clients  because  of  some  kind  of  financial  considerations  based 
on  the  idea  of  selling  shares.   It's  just  contrary  to  the  whole 
idea:   the  practice  of  law  is,  in  the  old  language,  a  profession, 
not  a  business.   I  haven't  really  thought  of  this,  it  never  occurred 
to  me  before,  but  I'm  not  at  all  sure  that  that  would  either  meet 
the  canons  of  ethics  or  the  American  Bar  Association  requirements. 

Some  law  firms  are  incorporated  nowadays  for  tax  reasons,  but 
all  the  shares  are  owned  by  the  lawyers.   Instead  of  a  partner  with 
a  50  percent  interest  in  the  firm,  if  you  incorporate  that  firm, 
that  same  partner  would  become  a  stockholder  and  hold  50  percent  of 
the  shares  of  the  company.   But  I  doubt  very  much  if  he'd  be  allowed 
to  try  to  sell  some  of  those  shares  to  the  public. 

Well,  I  really  thank  you  very  much  for  all  the  time  that  you've 
given  to  me.   It's  been  a  most  informative  series  of  interviews. 

It's  been  very,  very  interesting.   Much  more  interesting  than  I 
thought  it  would  be.   I  didn't  look  forward  to  it  particularly. 


Hicke:     [laughs]  Well,  that's  wonderful.   Thank  you  very  much. 
End  of  Interview. 
Transcribing  and  revisions  by: 

Georgia  K.  Stith 
Charlotte  S.  Warnell 
Kenneth  W.  Albertson 


194 
APPENDIX  A 

Remarks  of  Turner  H.  McBaine  to  PM&S 

Partners'  Dinner,  Bohemian  Club, 

March  25,  1977 


Ladies  and  Gentlemen: 

Those  of  you  who  are  old  enough  to  remember  when  Time  Magazine  was  the 
innovative  sensation  of  the  publishing  world  will  also  remember  that  Time 
developed  a  distinctive  and  sonorous  introduction  to  its  obituaries:   "As  it 
must  to  all  men,  death  came  to  so-and-so  last  week."  Well,  as  it  must  to  all 
men,  sixty- five  came  to  me  last  year,  so  I  stand  before  you  tonight  as  an 
advisory  partner,  with  a  license  to  reminisce  -  at  least  briefly. 

I  suppose  my  first  connection  with  PM&S  -  and,  oddly  enough,  with  Stan 
dard  -  was  when  I  was  selected  as  a  Rhodes  Scholar  from  California.   Vincent 
Butler,  a  member  of  the  firm  who  was  later  killed  in  an  airplane  crash,  and 
Floyd  Bryant,  an  officer  of  Standard  with  whom  I  later  worked  closely  and  for 
many  years  on  Elk  Hills  and  other  matters,  were  both  members  of  the  Rhodes 
selection  committee.   Thus  even  before  I  was  out  of  college,  both  PM&S  and 
Socal  began  what  was  to  prove  a  long  contribution  to  my  good  fortune. 

My  earliest  recollection  of  PM&S  as  such  dates  from  my  days  with  Cahill, 
Gordon  in  New  York  right  after  World  War  II.   Cahill,  Gordon  had  been  retained 
to  represent  Socal  in  a  case  brought  in  the  federal  court  in  New  York  by  a 
company  called  Winkler-Koch,  alleging  that  Socal  and  several  other  companies 
had  infringed  a  Winkler-Koch  crude  distilling  process,  and  I  was  assigned  to 
the  case.   We  moved  to  dismiss  Socal  on  jurisdictional  grounds,  and  I  had  what 
I  thought  was  the  good  luck  of  being  assigned  to  bring  our  brief  in  support  of 
the  motion  to  San  Francisco  to  clear  it  with  PM&S  and  Felix  Smith,  then 
Socal 's  General  Counsel.   On  arrival,  I  was  shown  into  the  office  of  Henry 
Hayes,  which  was  where  Hugh  Taylor  or  Wally  Kaapcke  has  been  the  last  few 
years.   I  went  over  the  brief  with  Henry,  and  had  gotten  at  least  a  moderately 
favorable  reception  when  the  door  burst  open  and  in  strode  the  redoubtable 
Felix.   After  acknowledging  my  introduction  to  him  in  a  perfunctory  manner, 
Mr.  Smith  threw  on  the  desk  in  front  of  me  his  copy  of  our  brief  and  said  - 
and  I'm  sure  I  can  quote  his  words  exactly  after  all  these  years  -  "Well,  you 
can  file  this  brief  if  you  want  to,  but  1^  wouldn't  sign  it,"  and  with  that  he 
turned  round  and  walked  out  -  leaving  me,  I  may  say,  in  somewhat  of  a  quan 
dary. 

Well,  we  did  file  the  brief,  and  fortunately  for  us,  our  motion  was 
granted  and  we  got  Socal  dismissed  from  the  suit. 

This  case  also  gave  me  an  early  lesson  in  practicality,  however.   After 
getting  Socal  out  of  the  case  at  considerable  expense  to  it,  the  company  later 
and  voluntarily  contributed  to  paying  off  a  judgment  obtained  by  the  plaintiff 
against  the  other  defendants,  and  never  again  thought  it  worthwhile  to  contest 
jurisdiction  over  it  in  New  York. 


195 

My  next  recollection  of  PM&S  is  being  interviewed  for  a  job,  when  I 
returned  to  San  Francisco  at  the  beginning  of  1947,  by  that  famous  one-man 
PM&S  Employment  Committee,  John  A.  Sutro.  The  experience  was  memorable,  and 
one  I  know  a  number  of  you  here  have  also  had:   Bang,  bang,  and  the  next  thing 
I  knew  I  was  at  work  -  in  my  case,  in  a  room  in  the  "attic"  on  the  21st  floor 
that  Stan  Madden  referred  to  last  year. 

In  New  York,  I  had  been  a  litigator,  so  on  joining  PM&S  I  was  assigned  to 
that  imposing  and  deliberate  master  trial  lawyer,  Col.  Eugene  D.  Bennett,  as  a 
litigator.   In  a  few  short  weeks,  however,  I  was  transferred  to  the  Standard 
Oil  group,  which  had  just  been  taken  over  by  Marshall  Madison,  on  the  death  of 
Felix  Smith  -  a  move  for  me  that  I  subsequently  came  to  regard  as  doubly  for 
tunate. 

Almost  immediately  I  received  a  summons  to  the  office  of  Eugene  Prince, 
in  the  room  Kirk  has  been  occupying  the  last  few  years,  and  there  I  first 
became  acquainted  with  what  was  to  become  a  perennial  producer  of  more  prob 
lems  than  petroleum  -  Elk  Hills.   You've  all  heard  the  story  of  the  young 
lawyer  who  closed  the  estate  on  which  the  firm  had  been  subsisting  for  years. 
Well,  I  didn't  make  that  mistake  with  Elk  Hills!   Elk  Hills  has  certainly 
required  more  lawyers'  time  since  that  day  than  any  other  single  property 
Standard  has  or  ever  has  had  in  this  country,  and  it's  still  going  strong.   I 
started  out  on  an  Elk  Hills  problem  in  1947,  and  I'm  still  working  on  several 
Elk  Hills  problems  right  now,  so  you  can  see  I've  done  my  part  in  sustaining 
the  firm.   As  I  turn  Elk  Hills  over  to  my  successors,  Tom  Haven  and  now  Al 
Pepin,  I'm  not  sure  whether  I  should  say  "Good  luck!"  or  not  -  or,  if  I  do  say 
it,  precisely  what  that  would  mean. 

Another  benefit  flowing  to  me  from  Elk  Hills  was  the  opportunity  to  work 
with  Gene  Prince,  a  truly  lovely,  warm  man,  and  a  fine  and  scholarly  lawyer. 
The  problem  in  which  Gene  enlisted  the  services  of  myself  and  Byron  Kabot , 
then  a  fellow  associate  in  the  office  and  now  General  Counsel  of  International 
Paper  -  and  a  cherished  client  first  of  Bill  Mussman  and  now  of  Jack  Bates  - 
was  a  unilateral  attempt  by  the  Navy  to  expand  the  boundaries  of  the  Elk  Hills 
Reserve,  which  would  bring  into  the  Reserve,  and  cloud  the  title  to,  numerous 
Standard  lands  lying  just  outside  the  then  existing  Reserve.   The  matter 
required  several  trips  to  Washington,  and  appearances  by  both  Floyd  Bryant  and 
me  before  the  House  Armed  Services  Committee  and  its  legendary  Chairman  Rep. 
Carl  Vinson  of  Georgia,  and  a  then  little-known  member,  Lyndon  B.  Johnson. 
With  the  help  of  the  Armed  Services  Committee,  we  repulsed  the  Navy's  effort 
to  expand  the  Elk  Hills  Reserve  at  that  time. 

As  you  may  imagine,  I  found  all  of  this  stimulating  and  exciting.   Sev 
eral  times  Gene  Prince  said  to  me,  however,  "I'm  tired  of  trips.   I  don  t 
really  think  it's  necessary  for  me  to  go  to  Washington.   You  go."  -  an  atti 
tude  I  never  really  understood  until  quite  a  number  of  years  later. 

Other  early  battles  spring  to  my  mind.   One  of  the  most  interesting,  to 
me,  was  the  Chinese  National  Airlines  case  in,  I  think,  1950.   It  was  sent  to 
me  by  the  Washington  firm  of  "Tommy-the-Cork"  Corcoran,  of  early  New  Deal 
fame,  whom  I  had  known  in  Washington  during  the  war.   CNAC,  as  it  was  known, 
was  owned  by  the  Chinese  Nationalist  Government.   As  it  was  being  driven  from 
the  mainland  of  China  by  the  Communists,  that  government  sold  all  of  the 


196 

assets  of  CNAC  to  Civil  Air  Transport,  a  Delaware  corporation  controlled  by 
General  Chennault,  of  Flying  Tiger  fame. 

Among  other  assets,  CNAC  had  almost  6  million  dollars  on  deposit  in  San 
Francisco  banks.   Civil  Air  Transport,  or  CAT,  made  a  demand  on  the  banks  for 
the  money,  but  the  Chinese  Communist  government  made  a  similar  demand,  through 
an  attorney-in-fact  in  this  country,  and  of  course  the  banks  happily  impounded 
the  funds,  saying  "We  can't  pay  either  of  you  until  we  get  a  court  order  to  do 


so." 


It  was  after  this  that  I  was  retained  to  sue  the  banks  for  CAT.   Sam 
Wright  and  I  took  on  the  job.   For  those  of  you  who  didn't  know  him,  Sam 
Wright  was  a  fine  lawyer,  and  a  most  entertaining  and  stimulating  companion. 
Our  problem  was  to  prove  that  the  sale  on  the  mainland  had  actually  taken 
place,  and  that  it  was  valid  and  effective  under  governing  law,  so  that  CAT 
had  good  title  to  the  assets.   Our  documents  were  fragmentary,  however,  and  in 
any  event,  how  did  we  prove  their  authenticity  and  effectiveness,  and  how  did 
we  prove  what  the  governing  law  was? 

While  we  were  wrestling  with  these  questions,  the  "act-of-state"  and 
separation  of  powers  doctrines  solved  our  problems,  and  enabled  us  neatly  to 
side-step  all  these  legal  technicalities. 

It  worked  this  way:   The  United  States  continued  to  recognize  the  Chinese 
Nationalist  as  the  legitimate  government  of  China.   Accordingly,  I  got  the 
Chinese  Nationalist  Government  in  Taiwan  to  instruct  the  Chinese  Ambassador  in 
Washington  to  write  to  the  Secretary  of  State  of  the  United  State  and  say: 
"Dear  Sir:   I  have  the  honor  of  informing  you  that  CNAC  was  wholly  owned  by  my 
government,  and  that  on  such-and-such  a  date  my  government  sold  all  of  the 
assets  of  CNAC  to  CAT.   I  understand  litigation  involving  this  sale  is  pending 
in  the  Federal  District  Court  in  San  Francisco.   I  would  appreciate  it  if  you 
would  call  to  the  attention  of  that  court  the  facts  set  forth  in  this 
letter."  Meanwhile  I  had  made  arrangements  with  my  friend  and  Oxford  class 
mate,  Dean  Rusk,  then  an  Assistant  Secretary  of  State  in  Washington,  for  the 
Secretary  of  State  to  write  to  the  Attorney  General,  on  the  receipt  of  the 

Ambassador's  letter,  saying:   "Dear  Sir:   I  enclose  a  letter  to  me  from  

the  duly  accredited  Ambassador  to  the  U.S.  of  the  Nationalist- Government  of 
China,  which  we  recognize.   I  accept  the  Ambassador's  statements  as  true.   I 
would  appreciate  it  if  you  would  call  this  letter,  and  the  enclosed  letter 
from  the  Ambassador,  to  the  attention  of  the  court  in  San  Francisco." 

The  Attorney  General  then  sent  the  Secretary's  letter,  with  the  Ambassa 
dor's  letter,  to  the  U.S.  Attorney  in  San  Francisco.   A  few  days  later  the 
U.S.  Attorney  got  up,  read  the  two  letters  to  the  court,  and  presto!  -  the 
court  entered  judgment  for  CAT,  without  requiring  further  proof  of  the  sale  to 
CAT  or  its  validity  or  effectiveness. 

The  letters  from  the  Ambassador  and  Secretary  of  State  had  turned  the 
matter  into  one  involving  the  foreign  relations  of  the  United  States,  within 
the  purview  of  the  Executive  rather  than  the  Judicial  Branch,  and  the  court 
had  simply  followed  the  wishes  of  the  Executive  as  a  matter  of  comity. 


197 

I  had  the  strong  impression  that  the  American  attorneys  for  the  Chinese 
Communists  -  one  of  whom  was  just  recently  a  candidate  for  Director  of  the  San 
Francisco  Bar  Association  -  were  as  surprised  at  the  conclusion  of  the  case  as 
I  was  when  I  first  tumbled  to  the  theory  and  mechanics  outlined  above  when 
thumbing  through  the  books  in  the  library  one  day  looking  for  a  way  to  win 
this  case. 

Incidentally,  this  is  one  of  the  very  few  cases  I  ever  took  on  a  contin 
gent  fee  basis,  and  since  the  Washington  lawyers  who  sent  it  to  me  hadn't  fig 
ured  out  how  to  win  it,  it  was  a  highly  satisfactory  percentage  of  the  money 
recovered.   Fortunately  I  had  developed  the  strategy  outlined  above  fairly 
early  on  in  my  efforts,  so  we  didn't  have  too  much  time  in  on  the  case.   The 
result  was  the  greatest  spread  between  time  and  fee  that  I've  ever  seen  in  the 
firm,  and  was  highly  gratifying. 

Other  cases  and  controversies  crowd  my  mind. 

I  remember  when  Jim  Wanvig  and  I  got  injunctions  shutting  down  two  pro 
ducing  oil  fields  in  California,  Aliso  Canyon  and  Coalinga  Nose,  the  first  and 
only  time  this  has  been  done  in  California,  so  far  as  I  know,  until  the  Navy 
recently  obtained  a  preliminary  injunction  shutting  down  the  Tule  Elk  field  on 
the  ground  that  it  was  draining  Elk  Hills. 

I  remember  when  Don  Peterson  and  I  saved  Standard's  leases  in  the  Moose 
Range  in  Alaska  from  an  early  effort  by  ecologists,  and  a  major  oil  field  in 
the  Gulf  of  Mexico  from  the  claims  of  a  Louisiana  tribe  named  Buras  which 
dated  back  to  the  1890s  and  had  lain  dormant  for  40  or  50  years. 

Lest  you  think  the  Buras  claims  weren't  serious,  they  were  upheld  by  the 
District  Court,  and  we  won  only  in  the  Court  of  Appeals,  with  cert,  denied. 

I  remember  the  formation  of  the  Iranian  Consortium  in  1954,  when  I  spent 
more  than  9  months  of  the  year  abroad  representing  Socal,  and  the  break-up  of 
Caltex  in  Europe  in  1967,  preceding  which  Otto  Miller  and  I  spent  18  months 
flying  back  and  forth  across  the  continent  every  few  weeks,  with  one  break  of 
several  months,  to  negotiate  with  Texaco  -  and,  I  may  say,  playing  a  lot  of 
dominoes  on  the  trips  to  and  fro. 

I  have  written  out  brief  synopses  of  these  and  a  number  of  other  matters 
which  seemed  to  me  to  be  of  interest  and  in  which  I  had  the  good  fortune  to 
participate,  and  will  file  it  with  Miss  Alexander  in  the  Library.   It  has  been 
my  hope  that  other  Advisory  Partners  would  write  out  similar  recollections,  so 
that  some  day  we  might  have  the  material  from  which  someone  might  prepare  an 
interesting  history  of  the  firm. 

In  closing,  I  want  to  suggest  that  we  adjourn  tonight  in  memory  of 
Marshall  Madison.   Marshall's  death  somehow  seems  to  me  to  mark  the  end  of  an 
era.   He  was,  to  my  mind,  the  creator  of  the  firm  as  it  stands,  more  than  any 
other  one  man.   It  was  his  vision  and  leadership  which  enabled  us  to  expand  to 
grasp  our  post-World  War  II  opportunities,  and  to  do  so  with  a  harmony  and 
success  matched  by  few,  if  any,  other  law  firms  anywhere  in  the  United  States. 
It  was  essentially  the  ground  rules  laid  down  by  Marshall  and  Jack  Sutro  that 
have  carried  us  to  where  we  are  today.   Every  time  I  look  around  the  firm,  I 
think  of  it  as  a  tribute,  and  now  a  memorial,  to  Marshall  Madison. 


198 

I've  recently  had  the  feeling  in  the  last  year  or  so,  however,  that  our 
ever  expanding  size  has  made  it  more  and  more  difficult  to  preserve  that  true 
spirit  of  partnership,  that  professional  camaraderie,  which  has  characterized 
this  firm,  and  made  possible  our  success.   I  urge  you  all  to  think  on  this, 
and  to  do  everything  possible  to  nurture  and  preserve  this  vital  but  intan 
gible  asset.   If  we  lose  it,  or  even  suffer  it  to  decline  appreciably,  we  will 
lose  a  lot  of  the  satisfaction  we've  all  had  in  being  members  of  one  of  the 
great  law  firms  in  the  United  States,  no  matter  what  our  incomes  may  be. 

Thank  you  and  good  night. 


199 

APPENDIX  B 

x 

THE  IRANIAN  OIL  AGREEMENT 


On  October  29th  of  last  year  the  oil  of  Iran,  virtually  shut  in  for  over 
3  years  in  one  of  the  bitterest  and  most  explosive  disputes  in  modern  history, 
began  to  flow  again  into  the  channels  of  world  trade. 

Thus  one  of  the  allies  of  the  West  completed  its  return  from  revolution 
and  financial  suicide;  thus  one  of  the  Free  World's  most  ticklish  political 
and  economic  problems  was  finally  solved. 

How  this  came  about  is  a  dramatic  story  of  modern  business  and  diplo 
macy  --  and  a  striking  illustration  of  the  ever-widening  role  of  American 
enterprise  abroad. 

The  story  of  oil  in  Iran,  until  1935  known  by  the  legendary  name  of 
Persia,  begins  at  least  as  early  as  1901.   In  that  year  an  Englishman  reared 
in  Australia,  named  William  Knox  D'Arcy,  obtained  a  concession  giving  him  the 
exclusive  right  to  explore  for  and  exploit  oil  throughout  all  of  Persia  except 
the  5  northern  provinces. 

Under  these  concessions  D'Arcy  was  to  give  the  Government  of  Persia, 
among  other  things,  16?0  of  the  "net  profits"  of  a  company  to  be  formed  to 
exploit  the  concession. 

As  is  usual  in  such  ventures,  the  discovery  of  oil  was  not  easy. 
D'Arcy's  First  Exploitation  Company  spent  5  years  of  hard  work  and  about  a 
quarter  of  a  million  pounds  sterling  before  oil  burst  forth  at  Masjid-i- 
Suleiman  in  1907. 

Meantime  D'Arcy  had  been  having  difficulty  raising  capital  in  England  for 
his  "wildcat"  venture  in  remote  Iran,  and  is  reputed  to  have  sought  to 
interest  Rockefeller  and  the  Dutch  in  his  concession. 

Also  in  the  meantime  Admiral  Fisher,  an  ardent  advocate  of  the  conversion 
of  the  British  Navy  from  coal  to  oil,  had  become  First  Lord  of  the  Admiralty, 
and  was  pressing  plans  for  securing  adequate  supplies  of  naval  fuel  oil. 

The  result  was  that  the  British  Government  stepped  in  to  prevent  the  con 
cession's  passing  into  foreign  hands,  and  the  Anglo-Persian  (later  Anglo- 
Iranian)  Oil  Company  was  formed  and  took  over  the  Persian  concession. 

There  are  a  number  of  stories  as  to  how  this  came  about.   Perhaps  the 
most  interesting  is  the  so-called  "Reilly"  story.   This  story  has  it  that 
D'Arcy,  a  deeply  religious  man  interested  in  the  welfare  of  the  Persian 
people,  was  enroute  from  the  Middle  East  to  Australia  via  America.   On  board 
the  ship  taking  him  from  Alexandria  to  New  York  he  met  a  young  priest,  a  mis 
sionary  returning  from  Africa.   As  their  friendship  ripened,  D'Arcy  told  the 
priest  of  his  Persian  concession  and  of  his  hopes  and  frustrations  concerning 
it.   At  first  the  priest  seemed  only  mildly  interested.   But  later  he  was 


200 

struck  by  a  brilliant  idea:  Why  not  transfer  D'Arcy's  concession  to  a  British 
missionary  group  dedicated  to  service  in  Persia?  Why  didn't  D'Arcy  thus  rid 
himself  of  the  necessity  of  wheedling  money  from  speculators,  and  at  the  same 
time  perform  a  pious  and  patriotic  act?  The  result  was  that  just  before  the 
ship  docked  in  New  York  D'Arcy  handed  over  all  the  rights  to  his  concession  to 
the  priest  --  and  thus  the  British  Intelligence  Service,  for  the  so-called 
missionary  was  in  fact  Sidney  Reilly,  one  of  the  cleverest  agents  of  that 
undercover  organization  which  worked  in  devious  ways  for  the  protection  and 
development  of  the  British  Empire. 

Whether  there  is  anything  to  this  story  I  cannot  say,  but  you  will  find 
it  set  forth  in  detail  in  "The  Secret  War"  by  Frank  C.  Henighen. 

In  any  case  the  known  historical  facts  are  that  in  1909  the  Anglo-Persian 
Oil  Company  took  over  D'Arcy's  concession,  and  that  in  1914  Winston  Churchill, 
then  First  Lord  of  the  Admiralty,  announced  that  the  British  Government  had 
acquired  a  53%  interest  in  Anglo-Persian.  At  the  same  time,  the  British  Admi 
ralty  obtained  a  long-term  contract  to  purchase  fuel  oil  from  the  company  at  a 
preferred  price. 

On  this  basis  the  British  Government  took  the  momentous  decision  to  con 
vert  the  British  Navy  from  coal  --  with  which  the  British  Isles  were  plenti 
fully  supplied  --  to  oil  --  of  which  the  United  Kingdom  had  none  --  and, 
according  to  some  historians,  the  first  World  War  was  won. 

But  the  new  arrangement  was  subject  to  criticism  from  the  Persians.   They 
claimed  that  the  price  in  the  long-term  contract  with  Anglo-Persian  was  too 
low,  and  that  as  a  result  the  British  Government  was  benefited  unfairly,  at 
the  expense  of  Persia.   In  support  of  this  argument,  they  cited  Churchill  him 
self  as  saying,  in  his  book  "World  Crisis,  1911-1914,"  that  the  contract  saved 
the  British  Government  40,000,000  pounds  between  1914  and  1923. 

Be  that  as  it  may,  the  work  in  Persia  went  forward.   New  fields  were  dis 
covered,  making  Persia  one  of  the  major  oil-producing  countries  in  the  world. 
At  Abadan,  an  island  separated  from  the  southern  shore  of  Persia  by  a  canal 
only  a  few  feet  wide,  a  refinery  was  built  which  eventually  became  the  world's 
largest. 


From  time  to  time,  differences  of  opinion  arose  between  the  Persian  Gov 
ernment  and  the  Company,  principally  as  to  the  meaning  of  the  phrase  "net 
profits"  in  the  concession  agreement. 


Iranian  discontent  with  their  share  of  the  proceeds  from  the  Anglo- 
Iranian  enterprise  was  intensified  when,  as  a  result  of  the  depression  of  1929 
and  following,  the  "net  profits"  of  Anglo-Iranian,  and  therefore  the  sums 
payable  to  Iran,  dropped  precipitately. 

In  1932  the  Government  of  Iran  cancelled  the  Anglo-Iranian  concession, 
and  the  parties  went  through  a  dress  rehearsal,  so  to  speak,  for  the  events  of 
1951. 


201 

Eventually  a  new  or  revised  concession  dated  April  29,  1933  was  negoti 
ated. 

Under  the  1933  agreement  relations  between  the  company  and  the  Iranian 
Government  improved,  and  there  was  a  steady  growth  in  production  from  Iranian 
fields  and  the  Abadan  refinery. 


Following  World  War  II,  however,  inflation  revived  and  intensified 
Iranian  dissatisfaction  with  their  share  of  the  proceeds  from  Iranian  oil. 

Late  in  1947,  Iran  asked  Anglo-Iranian  to  discuss  revision  of  the  1933 
concession. 

The  Iranians  pointed  out  that  in  round  figures  Venezuela  produced  about 
double  the  amount  of  oil  produced  from  Iran  and  received  over  $200,000,000  a 
year  in  royalties  and  taxes,  while  Iran  received  only  $32,000,000.   They  asked 
that  Iran  be  given  a  50-50  arrangement  similar  to  that  in  effect  in  Venezuela. 
They  also  asked  that  Iranians  be  given  a  voice  in  the  affairs  of  the  producing 
company. 

Now  a  50-50  arrangement  works  roughly  this  way:   The  producing  company 
supplies  the  capital  and  technical  skill  required  to  search  for,  find  and  pro 
duce  oil.   It  sells  the  oil  and  pays  income  taxes  to  the  host  country  on  its 
profits,  the  host  company  agreeing  to  limit  its  taxes  to  50%.   The  producing 
company  receives  a  foreign  tax  credit  in  its  own  country,  thus  enabling  it  to 
retain  its  share  of  the  profits  --  if  any. 

Anglo-Iranian  refused  the  Iranians'  demand  for  a  50-50  arrangement  and 
for  a  voice  in  producing  company  affairs.   They  agreed  to  increase  the  royal 
ties  payable  under  the  1933  concession,  and  in  1949  an  agreement  to  this 
effect  was  signed  with  the  Iranian  Government.   The  agreement  was  not  popular 
in  Iran,  however,  and  the  Government  hesitated  to  submit  it  to  the  Iranian 
Parliament,  or  Majlis. 

Dr.  Mohamed  Mussadeq,  a  politician  who  had  long  advocated  nationalization 
of  Iranian  oil,  led  the  opposition  to  the  agreement. 

The  announcement  in  January,  1951,  that  the  Arabian  American  Oil  Com 
pany  --  owned,  as  you  know,  by  Standard  of  California,  The  Texas  Company, 
Standard  of  New  Jersey,  and  Socony-Vacuum  --  had  entered  into  a  50-50  arrange 
ment  with  Saudi  Arabia  added  fuel  to  the  fire. 

Anglo-Iranian  offered  to  reopen  negotiations  looking  toward  a  50-50 
arrangement  with  Iran,  but  by  this  time  it  was  too  late  --  Mussadeq  was  in  the 
saddle. 

That  wily  and  weeping  politician  introduced  in  the  Majlis  a  resolution 
calling  for  nationalization  of  Iranian  oil.   The  then  Prime  Minister,  General 
Razmara,  referred  it  to  a  special  committee.   The  committee  reported  that 
nationalization  was  not  practicable,  and  of  doubtful  legality  as  proposed. 
When  Razmara  presented  this  report  to  the  Majlis,  he  was  assassinated  by  a 


202 

According  to  the  Iranian  author  of  a  recent  book  called  "Oil  Diplomacy," 
a  copy  of  Anglo-Iranian's  consent  to  a  50-50  arrangement  with  Iran  was  found 
in  Razmara's  pockets  after  his  death. 

With  Mussadeq  triumphant,  the  Iranian  oil  industry  was  nationalized,  and 
the  National  Iranian  Oil  Company  was  created  to  take  over  the  properties  and 
functions  of  what  was  thereafter  invariably  referred  to  in  Iran  as  the  "ex 
Anglo-Iranian  Oil  Company"  or  the  "former  Anglo-Iranian  Oil  Company." 

The  claims  of  Anglo-Iranian  against  the  Government  were  to  be  examined, 
along  with  the  claims  of  the  Government  against  Anglo-Iranian,  and  25%  of  the 
current  revenue  from  Iranian  oil  set  aside  to  meet  any  payments  which  might  be 
due  the  company. 

Of  course  the  company  did  not  willingly  accept  nationalization  of  its 
properties  on  this  basis,  and  Mussadeq  set  out  to  evict  Anglo-Iranian  from 
Iran. 

As  a  result,  Anglo-Iranian  eventually  stopped  shipping  oil,  the  produc 
tion  from  Iranian  fields  dwindled  to  a  trickle,  and  the  Abadan  refinery  was 
finally  shut  down. 

Now  this  was  a  serious  matter,  for  oil  was  essential  to  the  success  of 
the  Marshall  Plan  for  the  recovery  of  Western  Europe,  and  Iranian  oil  had 
played  a  big  part  in  that  plan. 

To  meet  the  problem  posed  by  the  Iranian  shut-down,  a  Foreign  Petroleum 
Supply  Committee  was  set  up  in  the  United  States,  with  Government  approval  and 
Department  of  Justice  clearance,  and  an  Oil  Supply  Advisory  Commission  orga 
nized  in  England. 

Through  these  committees  the  international  oil  companies  co-ordinated 
their  programs  and  facilities,  including  shipping,  and  successfully  closed  the 
gap  caused  by  the  removal  of  Iranian  oil  from  world  trade. 

Meanwhile,  in  July,  1951,  President  Truman  had  offered  to  send 
Mr.  Averell  Harriman  to  Iran  to  discuss  the  situation.   Dr.  Mussadeq  accepted 
the  offer.   Mr.  Harriman's  arrival  in  Teheran  was  the  occasion  for  Communist- 
led  anti-American  riots  in  which  20  persons  were  killed  and  300  injured.   Mar 
tial  law  was  declared. 

The  Harriman  mission  came  to  nothing,  and  a  British  mission  headed  by  the 
Lord  Privy  Seal  Richard  Stokes  went  out  to  Teheran. 

The  Stokes  mission  also  failed,  and  Harriman  and  Stokes  both  left  Iran. 

On  September  27,  Iranian  troops  seized  the  Abadan  refinery,  and  shortly 
thereafter  all  Anglo-Iranian  personnel  left  Iran. 

On  September  28,  Great  Britain  requested  the  Security  Council  of  the 
United  Nations  to  intervene  in  the  matter  as  a  threat  to  world  peace,  and  Mus 
sadeq  announced  that  he  would  fly  to  New  York  and  appear  before  the  Security 
Council  to  contest  its  jurisdiction,  which  he  subsequently  did. 


203 

In  December  1951  Mussadeq  sent  an  ultimatum  to  former  Anglo-Iranian 
customers  to  make  arrangements  within  10  days  to  buy  oil  from  Iran  or  lose 
that  privilege.   The  ultimatum  expired  without  any  acceptances.   Plenty  of  oil 
was  available  elsewhere  at  prices  as  low  as  those  Iran  offered. 

During  1952  an  International  Bank  mission  went  out  to  Iran  and  made  sev 
eral  efforts  to  find  a  solution  to  the  problem,  all  to  no  avail. 

Later  in  1952  the  International  Court  gave  judgment  affirming  its  lack  of 
jurisdiction  over  the  dispute;  Mussadeq  was  given  power  to  rule  by  decree  for 
a  period  of  one  year;  and  diplomatic  relations  between  Iran  and  Great  Britain 
were  broken  off. 

The  impasse  was  complete. 

There  are  2  points  that  I  should  like  to  make  here: 

First,  while  all  generalizations  over-simplify,  I  should  say  that  the 
basic  mistakes  which  led  to  this  impasse  were  that 

(a)  Iran  assumed  that  the  world  had  to  have  its  oil;  and 

(b)  the  British  assumed  that  Iran  had  to  sell  it  oil. 
Both  were  wrong,  as  events  proved. 

Second,  I  never  met  a  single  Iranian  during  the  course  of  my  stay  in  Iran 
last  year  who  did  not  consider  Dr.  Mussadeq  to  be  a  great  patriot,  not  a  vil 
lain.   Even  those  who  disapproved  of  him  the  most  considered  only  that  he  did 
not  know  when  to  stop,  deplored  only  that  he  had  not  made  a  deal  after  he  had 
evicted  Anglo-Iranian  from  Iran. 

But  he  did  not  know  when  to  stop,  and  continued  to  insist  that  Iran  would 
operate  its  own  oil  industry,  though  it  had  neither  the  capital  nor  the  tech 
nical  know-how  to  do  so,  and  though  his  proposals  completely  ignored  the  basic 
economic  facts  of  life. 

As  Mussadeq 's  policies  plunged  Iran  deeper  and  deeper  into  difficulties, 
his  oratory  and  dramatics  whipped  the  crowds  into  greater  and  greater  frenzy. 
Eventually  he  clashed  with  the  Shah,  a  patriotic  monarch  dedicated  to  the 
preservation  of  constitutional  government,  and  the  Shah  felt  it  necessary  to 
leave  Iran. 

But  Mussadeq  was  soon  overthrown,  as  you  know,  and  the  Shah  made  a  dra 
matic  return  to  Teheran. 

A  measure  of  sanity  returned  to  Iranian  affairs. 

The  Government  of  the  United  States  then  determined  to  make  another 
effort  to  find  a  solution  to  the  Iranian  problem.   In  the  fall  of  1953, 
Mr.  Herbert  Hoover,  Jr. ,  a  California  geologist  and  petroleum  engineer  known 
to  many  of  you,  was  appointed  Special  Assistant  to  the  Secretary  of  State  to 
investigate  the  matter. 


204 

Mr.  Hoover  went  to  Iran,  and  after  assessing  the  situation  there 
concluded  that  it  was  unrealistic  to  think  of  Anglo-Iranian  returning  to  Iran 
alone,  under  any  terms. 

The  only  possible  solution,  he  felt,  was  the  formation  of  a  group  or  Con 
sortium  of  international  oil  companies  to  operate  the  Iranian  oil  industry  in 
a  manner  consistent  with  other  similar  operations,  and  at  the  same  time 
meeting  Iranian  needs  and  aspirations. 

The  British  agreed,  and  in  December,  1953,  Sir  William  Fraser,  the 
Chairman  of  Anglo-Iranian,  invited  7  major  international  oil  companies  to  come 
to  London  to  discuss  the  possibility  of  forming  such  a  Consortium. 

These  companies  were  the  Royal  Dutch-Shell  group,  the  Compagnie  Francaise 
des  Petroles,  and  5  American  oil  companies:  Standard  of  California,  The  Texas 
Company,  Standard  of  New  Jersey,  Socony-Vacuum,  and  the  Gulf  Oil  Corporation. 

Sir  William  took  the  position,  which  was  not  disputed,  that  he  had  the 
right  "to  choose  his  partners,"  so  to  speak. 

Before  going  to  London,  the  U.  S.  companies  felt  it  necessary  to  assure 
themselves  that  nothing  that  was  contemplated  in  the  formation  of  the  Iranian 
Consortium  would  bring  them  into  violation  of  the  antitrust  laws  of  the  United 
States. 

Accordingly,  the  National  Security  Council  laid  the  basic  outline  of  the 
Consortium  before  the  Attorney  General  of  the  United  States,  and  requested  his 
opinion  as  to  its  legality  under  our  laws. 

The  Attorney  General  replied  that  in  his  opinion  the  proposed  Consortium 
was  not  in  violation  of  any  of  the  laws  of  the  United  States,  stressing  that 
each  Consortium  member  was  to  be  free  to  market  separately,  at  its  own  prices, 
its  individual  share  of  Iranian  oil  and  products. 

With  this  assurance,  the  5  U.  S.  companies  joined  the  talks  which  opened 
in  London  in  January,  1954. 

Perhaps  you  will  be  interested  in  an  editorial  which  appeared  in  the 
Beaverbrook  press  a  few  days  after  our  arrival  in  England.  The  editorial  con 
cluded: 

"Reports  persist  that  an  international  oil  marketing  company 
may  be  set  up  to  sell  Persian  oil.   All  agree  that  the  American  com 
panies  are  pressing  for  a  major  holding  and  that  as  a  part  of  the 
deal  they  want  to  supply  the  technicians  for  the  Abadan  refinery. 

*  *  *  The  Americans  are  moving  in  on  Persian  oil. 

Another  shameful  stage  in  the  liquidation  of  British  power  and 
prestige  in  the  Middle  East  is  in  progress." 

I  should  add  that  this  was  the  only  public  comment  of  this  kind  that  we 
heard  during  our  stay  in  England,  and  I  mention  it  so  that  you  will  perhaps 


205 

better  understand  me  when  I  say  that  I,  for  one,  was  keenly  conscious  of  the 
forces  of  history  swirling  about  us  as  we  sat  down  to  our  London  work. 

Four  major  questions  confronted  the  London  group: 

1.  How  big  a  share  in  the  Consortium  should  each  participant  have? 

2.  How  much  should  each  new  participant  pay  Anglo-Iranian? 

3.  What  kind  of  an  arrangement  could  the  Consortium  make  with  Iran? 

4.  What  kind  of  arrangements  should  the  Consortium  members  make  between 
themselves? 

Discussing  these  in  turn: 

The  question  of  how  big  a  share  each  company  should  have  involved  not 
only  economics,  but  politics  and  prestige,  both  internal  and  international. 

It  was  eventually  decided  that  Anglo-Iranian  should  retain  a  40% 
interest,  Royal-Dutch  Shell  have  14%,  the  French  6%,  and  each  of  the  5 
American  companies  8%. 

It  was  also  decided  that  the  5  American  companies  would  be  free  to  offer 
a  5%  interest  to  any  other  established  American  oil  companies  who  might  want 
to  join  the  Consortium  if  negotiations  with  Iran  for  a  new  agreement  were  suc 
cessful.   It  was  decided  that  if  the  Consortium  reached  a  satisfactory  agree 
ment  with  Iran,  the  new  participants  would  pay  Anglo-Iranian  as  if  the  latter 
had  a  going  concession  --  in  effect  compensating  Anglo-Iranian  in  place  of 
Iran,  except  for  loss  of  profits  during  the  shutdown  period. 

Even  so,  the  amount  of  compensation  remained  to  be  determined.   The  only 
comparable  transaction  known  was  the  purchase  of  a  40%  interest  in  Aramco  by 
Standard  of  New  Jersey  and  Socony-Vacuum  in  1947. 

Obviously  the  amounts  the  new  participants  would  be  willing  to  pay  Anglo- 
Iranian  would  also  depend  on  the  kind  of  an  arrangement  the  Consortium  could 
make  with  Iran.   The  advice  of  Mr.  Hoover  and  of  the  U.  S.  and  British  Ambas 
sadors  to  Iran  was  sought  on  this  point,  and  certain  minimum  requirements  were 
laid  down.   Also  obviously  any  arrangement  which  the  Consortium  would  be 
willing  to  make  with  Iran  had  to  be  a  realistic  one,  and  not  such  as  to  lead 
to  disruption  and  chaos  in  the  world  oil  industry. 

Lastly,  it  was  necessary  to  decide  what  kind  of  arrangements  the  Consor 
tium  members  should  make  among  themselves  --  to  set  up  machinery  for  deter 
mining  production  and  the  operation  of  the  Abadan  refinery,  at  the  same  time 
leaving  each  member  free  to  market  its  own  oil  and  products  at  its  own  indi 
vidually  determined  prices. 

Now  all  these  things  had  to  be  done  so  as  to  satisfy,  among  other  things, 
the  tax  and  other  laws  of  four  countries:  the  United  States,  England,  Holland 
and  France. 


206 

After  more  than  2  months  of  discussions  and  work  in  London,  a  group  of 
negotiators  went  out  to  Teheran  in  early  April,  1954. 

Between  April  14th  and  May  18th  there  were  16  meetings  with  the  Iranian 
negotiators,  many  of  them  lasting  many  hours. 

Both  the  Iranians  and  the  British  determined  to  let  bygones  be  bygones, 
and  the  negotiations  were  characterized  from  the  beginning  by  good  will  on 
both  sides. 

Nevertheless,  and  despite  the  best  efforts  of  the  negotiators,  it  proved 
impossible  to  reach  agreement,  and  negotiations  were  broken  off  during  the 
latter  part  of  May. 

The  Consortium  negotiators  returned  to  London  where  they  met  with  repre 
sentatives  of  all  the  Consortium  members  to  see  what  could  be  done  to  come 
close  to  the  Iranian  desires. 

After  discussions  in  London  between  the  Consortium  members  lasting  a 
month,  the  Consortium  negotiators  returned  to  Teheran  late  in  June. 

The  chief  negotiator,  Mr.  Orville  Harden,  whose  doctor  forbade  him  to 
return  to  the  Middle  East,  was  replaced  by  Mr.  Howard  Page,  a  Stanford  grad 
uate  from  Berkeley  and  a  Vice  President  of  the  Standard  Oil  Company  of  New 
Jersey. 

There  were  29  more  meetings  between  the  negotiators,  and  more  between 
various  committees  and  experts,  as  point  by  point  was  hammered  out  by  give  and 
take. 

Over-all  agreement  was  finally  reached,  and  on  August  4th  an  Aide  Memoire 
embodying  the  points  agreed  to  was  signed. 

A  final  agreement  was  then  drafted  in  Teheran,  and  the  Consortium  party 
returned  to  London,  where  agreements  regulating  the  relationships  between  the 
Consortium  members  and  providing  for  compensation  to  Anglo-Iranian  were  put 
into  final  form. 

All  of  the  agreements  were  then  submitted  to  the  Attorney  General  of  the 
United  States,  who  concluded  that  they  were  in  conformity  with  his  previous 
opinion  and  therefore  approved  them. 

After  the  so-called  Government  Agreement  was  signed  by  the  Iranians  in 
Teheran,  it  was  flown  from  Iran  by  special  airplane  and  signed  by  the  Dutch 
and  French  in  Europe,  by  the  English  in  London,  and  by  the  Americans  in  New 
York,  and  it  was  ratified  by  the  Iranian  Majlis  and  approved  by  His  Majesty, 
the  Shah,  becoming  effective  on  October  29,  1954. 

Thus  ended  one  chapter,  and  another  began,  in  the  stormy  history  of 
Iranian  oil. 

I  feel  it  only  right  to  pay  tribute,  at  this  point,  to  the  vital  and 
important  roles  played  in  both  the  discussions  in  London  and  in  the  negotia- 


207 

tions  in  Teheran  by  Mr.  Hoover  and  by  Mr.  Loy  Henderson,  the  American 

Ambassador  to  Iran. 

•« 

Mr.  Hoover  was  as  indefatigable  as  he  was  patient.   Shuttling  between 
Washington,  London  and  Teheran,  he  crossed  the  Atlantic  14  times  during  the 
approximate  12  months  that  he  devoted  to  this  job.   An  experienced  busi 
nessman,  he  refused  to  attend  any  of  the  discussions  between  the  Consortium 
members  or  the  negotiations  with  the  Iranians,  but  stood  ready  at  all  times  to 
give  advice  and  assistance  to  the  companies,  or  a  shove  where  needed.   An 
inexperienced  diplomat,  he  nevertheless  was  able  to  bring  about  the  meeting  of 
minds  of  the  Governments  of  Iran,  Great  Britain  and  the  United  States  which 
made  the  consummation  of  the  Consortium  possible.   How  well  he  succeeded  in 
both  aspects  of  his  task  is  attested  by  the  fact  that  he  concluded  his  labors 
with  the  good  will  and  admiration  of  all  concerned  with  the  Iranian  Consor 
tium  --  and  was  promptly  made  Undersecretary  of  State  of  the  United  States,  a 
post  he  now  holds. 

Now  the  Iranian  Agreement  is,  in  essence,  a  50-50  arrangement  which  rec 
ognized  Iran's  ownership  of  its  oil  and  related  facilities,  and  assures  Iran 
of  a  voice  in  the  operation  of  its  properties. 

The  agreement  grants  to  two  Operating  Companies  formed  by  the  Consor 
tium  --  one  for  exploration  and  producing  and  one  for  refining  --  the  right  to 
produce  that  oil  and  to  use  those  facilities  for  a  term  of  25  years,  subject 
to  3  five-year  extensions. 

The  Operating  Companies  are  Dutch.   The  Iranians  wanted  Iranian  com 
panies;  the  British  wanted  British  companies.   The  Dutch  companies  were  a  com 
promise  solution. 

There  are  2  Iranian  directors  on  the  board  of  each  operating  company, 
plus  a  third  Iranian  national  appointed  by  the  Consortium  members. 

The  operating  companies  are  owned  by  the  Consortium  members  not  directly, 
but  through  an  English  holding  company  with  headquarters  in  London. 

Parliament  as  well  as  the  Majlis  had  to  be  considered  in  working  out  an 
acceptable  solution  to  this  problem. 

The  oil,  when  produced,  is  purchased  from  the  National  Iranian  Oil  Com 
pany,  or  N.I.O.C.,  by  the  Consortium  members  individually,  or  by  Trading 
Companies  established  by  them,  and  in  turn  sold  in  Iran  by  those  companies  at 
posted  prices  available  to  all  buyers  generally. 

The  Consortium  members  guarantee  that  by  the  end  of  the  third  year  they 
will  bring  Iranian  production  and  exports  back  to  the  pre-shutdown  level.   To 
Iran  this  is  somewhat  disappointing,  but  it  is  600,000  barrels  of  oil  a  day  -- 
which  is  a  lot  of  oil  to  find  room  for  in  the  world  today.   It  is  hoped,  of 
course,  to  increase  Iranian  production  above  this  figure  and  in  time  this 
undoubtedly  will  be  done. 

The  Trading  Companies,  which  follow  the  nationalities  of  their  affiliated 
Consortium  members,  are  registered  in  Iran,  and  each  Trading  Company  pays 
Iranian  income  taxes  on  its  profits  at  the  rate  of  50%. 


208 

In  addition,  each  Trading  Company  makes  a  stated  payment  to  N.I.O.C. 
equal  to  12-1/2%  of  that  Trading  Company's  posted  price  for  its  oil,  this  pay 
ment  being  a  credit  against  that  company's  Iranian  tax. 

N.I.O.C.  has  the  right  to  take  oil  in  kind,  at  posted  prices,  equal  to 
this  stated  payment,  and  to  use  or  export  this  oil  as  it  sees  fit. 

It  also  has  the  right  to  obtain,  at  cost,  all  products  required  for 
internal  consumption  in  Iran. 

One  of  the  unusual  features  of  the  Government  Agreement  is  that  it  con 
templates  and  encourages  N.I.O.C.'s  taking  over  so-called  "non-basic"  func 
tions  from  the  Operating  Companies,  including 

Housing  Estates 

Medical  and  health  services 

Operating  of  food  supply  systems,  canteens,  restaurants  and 
clothing  stores. 

The  last  act  in  the  formation  of  the  Iranian  Consortium  has  just  recently 
been  completed.   On  April  28th,  in  New  York  and  Toronto,  papers  were  completed 
assigning  to  9  additional  American  oil  companies  a  5%  interest  in  the  Consor 
tium. 

These  companies  are: 

American  Independent  Oil  Company 

Atlantic  Refining  Company 

Hancock  Oil  Company 

Pacific  Western  Oil  Corporation 

Richfield  Oil  Corporation 

San  Jacinto  Petroleum  Corporation 

Signal  Oil  and  Gas  Company 

Standard  Oil  Company  (Ohio) 

Tide  Water  Associated  Oil  Company. 

Together  these  companies  constitute  a  ninth  member  of  the  Consortium. 

I  think  you  will  agree,  from  the  outline  I  have  given  you,  that  the  so- 
called  Government  Agreement  gives  due  recognition  to  the  legitimate  aspira 
tions  and  interests  of  the  Iranian  people. 

On  the  other  hand,  it  affords  to  the  Consortium  companies  the  degree  of 
security  and  the  prospect  of  reasonable  reward  necessary  to  justify  the  com 
mitment  of  their  resources  and  facilities  to  the  reactivation  of  the  Iranian 
oil  industry. 

During  the  recent  visit  of  the  Shah  of  Iran  and  his  Queen  to  San 
Francisco,  I  was  gratified  to  hear  His  Majesty  express  his  satisfaction  with 
the  agreement,  and  his  confidence  in  its  future. 


209 

If  the  present  atmosphere  of  good  will  and  co-operation  continues,  the 
Iranian  Oil  Agreement  should  benefit  Iran  and  the  Consortium  members  alike  for 
many  years  to  come. 

Thank  you. 


Turner  H.  McBaine 
May  3,  1955 


210 

FINANCIAL  ASPECTS  OF  IRANIAN  CONSORTIUM 


The  transactions  which  set  the  stage  for  the  introduction  of  the  Consor 
tium  into  Iran  in  1954  were  briefly  as  follows: 

(1)  Anglo-Iranian  Oil  Company,  technically  at  the  request  of  the 
original  Members,  surrendered  to  Iran  all  its  rights,  titles  and  interests  in 
Iran  (including  rights,  titles,  and  interests  to  fixed  assets  used  in  its  oil 
operations) ; 

(2)  As  consideration  for  such  surrender,  Members  agreed  to  pay  Anglo- 
Iranian  $1.5  million  down  payment  for  each  one  percent  share  interest  acquired 
plus  payments  at  the  rate  of  lOC/bbl.  totaling  $8.5  million  for  each  one  per 
cent  share  interest  acquired.   The  total  obligation  to  Anglo-Iranian  owed  by 
the  other  60%  shareholders  was  thus  $600  million  (grossing  up  to  $1000  million 
on  a  100°0  consortium  basis); 

(3)  In  addition  to  consideration  received  from  other  Consortium  Members, 
Anglo-Iranian  received  from  Iran  $70  million  in  ten  annual  installments.   This 
was  a  net  figure  negotiated  after  taking  into  account  Anglo-Iranian's  relin- 
quishment  of  claims  in  respect  of  assets  in  Iran  --  including  various  assets 
(such  as  internal  distribution  facilities)  not  included  in  the  Consortium 
Agreement,  and  also  after  taking  account  of  various  claims  and  counter-claims 
by  Iran  and  NIOC  and  by  Anglo-Iranian. 

Our  payments  and  commitments  to  Anglo-Iranian  (BP)  for  a  7%  share  thus 
break  down  as  follows: 

$10.5  million  down  payment; 

$59.5  million  at  the  rate  of  lOC/bbl. 

As  of  the  beginning  of  1969,  the  unpaid  balance  of  our  lOC/bbl .  obliga 
tion  amounted  to  $19.3  million.  With  normal  growth  in  Irancal  offtake,  it 
should  be  fully  paid  off  in  late  1971. 

The  $10.5  million  down  payment  was  capitalized  in  Socal's  books  and  is 
now  fully  amortized.   The  lOC/bbl .  obligation  matures  only  on  actual  lifting 
of  oil.   Payments  are  made  from  profits  after  Iranian  tax,  and  are  expensed 
currently  on  our  books. 

We  advance  to  the  Operating  Companies  our  share  of  funds  required  for 
working  capital  and  for  the  financing  of  new  facilities.   These  new  facilities 
become  the  property  of  NIOC  upon  completion,  and  NIOC  then  owes  the  full 
amount  of  the  cost  to  the  Operating  Companies.   This  debt  is  repayable  over  10 
years  for  fixed  assets  (20  years  for  land  assets),  but  is  offset  by  exactly 
equal  "assets  charges"  credited  to  NIOC  by  the  Operating  Companies.   The  unex- 
tinguished  (i.e.,  unamortized)  portions  of  these  NIOC  debts  are  included  as 
assets  on  the  Operating  Companies'  balance  sheet  and  also  on  Socal's  balance 
sheet. 


211 

The  Operating  Companies  own  movable  assets  and  certain  current  assets 
directly.   However,  of  the  total  unamortized  asset  balance  of  approximately 
$360  million  carried  on  the  Operating  Companies'  books  (Socal's  share  $25  mil 
lion)  as  of  the  end  of  1968,  only  some  $6  million  (Socal's  share  $.42  million) 
represents  movable  assets. 


212 


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TAPE  GUIDE  --  Turner  H.  McBaine 


N 


Interview  1:   April  16,  1986 

tape  1,  side  A 1 

tape  1,  side  B 7 

tape  2,  side  A 14 

tape  2,  side  B 21 

tape  3,  side  A 27 

Interview  2:   April  29,  1986 

tape  4,  side  A 32 

tape  4,  side  B 38 

tape  5,  side  A 45 

tape  5,  side  B 53 

tape  6,  side  A 59 

Interview  3:   June  19,  1986 

tape  7,  side  A 60 

tape  7,  side  B 67 

tape  8,  side  A 74 

Interview  4:   June  26,  1986 

tape  9,  side  A 78 

tape  9,  side  B 85 

tape  10,  side  A 92 

tape  10,  side  B 100 

Interview  5:   July  3,  1986 

tape  11,  side  A 102 

tape  11,  side  B 108 

Interview  6:  July  17,  1986 

tape  13,  side  A 116 

tape  13,  side  B 121 

tape  14,  side  A 128 

tape  14,  side  B 135 

tape  15,  side  A 143 

Interview  7:   July  28,  1986 

tape  15A,  side  A 147 

tape  15A,  side  B 157 

tape  16,  side  A 168 

tape  16,  side  B 176 

Interview  8:  August  6,  1986 

tape  17,  side  A 180 

tape  17,  side  B 185 

tape  18,  side  A 190 


217 
INDEX 

Act  of  State  Doctrine,   81-83 

affirmative  action,   152-158 

Amoco  Oil  Company,   127 

Anglo-Iranian  Oil  Company,   85,  86,  89,  92 

See  also  British  Petroleum 
antitrust  law,   96 
Armstrong,   35 
Asia  Foundation,   184-189 
Atlantic  Richfield  Company,   127 

Bank  of  California,   68 

Bare,  Joseph,   106 

Bay  Area  Council,   189 

Bennett,  Eugene,   63-65,  68,  72,  144,  176 

Big  Eight  antitrust  case,   127-138 

Bowles  children,   115-120 

Bowles,  Henry,   115-120 

British  Petroleum,   92,  93,  96 

Brown,  Hillyer,   41,  42 

Bryant,  Floyd,   75,  76 

Buras  case,  111-114 

business  procedures,   172,  173 

Cahill,  Gordon,  Reindel  &  Ohl,   60-62 

Caltex,   98-107 

characteristics  of  the  firm,   174-178 

Chennault,  Claire,   80-84 

Chevron  Corp. ,   107,  111-114 

Chevron  stockholders  actions,   107-110 

Chiang  Kai-shek,   80-84 

Churchill,  Winston  S.,   29-31,  53,  56,  85 

Churchill,  Randolph,   29-31 

Civil  Air  Transport  case,   80-84 

Code  Napoleon,   111,  112,  134 

computers,   166-172 

Control  Data,   129 

Corcoran,  Thomas  G.,   80,  83,  84 

Dapello,  Bud,   167 

Davies,  Marion,   44 

Depression,   35 

Donovan,  William  J.,   48-52,  54,  57 

Dunne,  Arthur  B.,   118,  119 

Elk  Hills  case,   68,  72-78 
Employment  Committee,   147-158,  164 
environmental  problems,   120-126 
Epley,  Marion,   100,  101,  106 
ethics,   134-138 
Exxon  Company,   127,  131 


218 

F-310  case,   120-126 
Federal  Trade  Commission,   122-138 
Field,  Frederick  Vanderbilt,   81 
Follis,  Gwin,   86,  87,  98,  100,  139 
Fraser,  Sir  William,   87,  95 
Fuller,  Maurice  D.L.  Sr.,   67,  68 

gasoline  additives,   120-126 

growth,   163-166 

Gulf  Oil  Corporation,   86,  107,  127 

Hambrecht  &  Quist,  Inc.,   179,  180 

Haven,  Tom,   106 

Haynes,  H.J.,   139 

Hearst,  William  Randolph,  42-46 

hiring  associates,   60,  62 

Industry  Education  Council  of  California,   190 
Intel  Corp.,   178-180 

International  Business  Machines,   129,  166,  167 
Iranian  Consortium,   85-98 

Johnson,  Lyndon  B.,   77,  78,  187,  188 

Kaapcke,  Wallace,   132,  139,  145,  146 

Keogh  Plan,   67 

Kirkham,  Francis,   69,  70,  77,  80,  123,  138,  143 

Lambert,  Scott,   106 

law  firms,  characteristics,   71 

Lawler,  Felix  &  Hall,   43 

legal  writing,   70 

legal  memoranda  file,   162 

Lenzen,  Theodore,   86-89,  92,  96,  98 

Library  Committee,   159-163 

lobbyists,   69,  133,  134 

MacLaury,  Richard,   110 

Madison,  Marshall,   64-66,  70,  72,  79,  86,  98,  139,  140, 

144,  176 

Magowan,  Robert  A.,   107-110 
malpractice  insurance,   144 
management,  65,  143-173 
Management  Committee,   144-147 
Mann,  Bruce,   178-180 

McBaine,  James  Patterson,   5,  9,  23,  32 
McBaine,  Hudson,   2,  5 
McBaine,  Turner  H. 

as  Socal  general  counsel,   138-142 

at  Cahill,  Gordon,   60,  61 

college  years,   12-21 

community  activities,   180-193 

joins  PM&S,   60-63 

law  school,   32-40 


219 

navy  service, •  46-59 

on  law  review,   36,  37 

Rhodes  scholarship  and  Oxford,   21-32 

youth  and  early  education,  5-12 
Miller  &  Lux,  Inc.,   114 
Miller,  Otto,   100,  101,  106,  139 
Miller,  Henry,  estate  of,   114-120 
Mobil  Oil  Company,   127 
Mossedeq,   85 

Nylan,  John  Francis,   42-46 
Nickel  children,   115-120 
Nielson,  Sigvald,   68,  69 

O'Brien,  James  E. ,   94 

Odgers,  Richard,   110 

Office  of  Strategic  Services,   47-59 

Organization  of  Petroleum  Exporting  Countries  (OPEC),   78,  101 

Orrick,  Palmer  &  Dalquist,   40-42 

Orrick,  William,  Sr.,   41,  42 

partnership  decisions,   145,  146 

Peterson,  Don,  112 

petroleum  reserves,   72-78 

picnics,   68 

postwar  growth,   65,  66 

Pound,  Roscoe,   83 

Prince,  Eugene,   63,  65,  70,  72,  75-77,  79,  144,  176 

Radin,  Max,   34 

recruiting,   148-151 

Rembe,  Toni,   155-157 

reporting  to  senior  partners,   78-80,  98,  140 

retirement  plan,   66,  67 

Roberts,  Frank,   138,  178 

Robinson,  C.  Ray,   117,  119,  120 

Rusk,  Dean,   82 

Safeway  Stores  case,   107-110 

San  Simeon,   44-46 

Sears,  George,   131 

Shell  Oil  Company,   86,  127 

Shults,  Al,   69 

Smith,  Felix,   62,  64 

Socony  Mobil  Oil  Company,   86 

See  also  Mobil  Oil  Company 

Standard  Oil  of  California,  41,  64,  68,  69,  72-80,  85-107, 
120-126,  159 

See  also  Chevron 
Standard  Oil  of  New  Jersey,   86 

See  also  Exxon  Corp. 

Stanford  Law  School  Board  of  Visitors,   191,  192 
summer  clerks,   150 


220 
Sutro,  John  A.,  Sr.,   62,  63,  136,  144,  145,  147,  152,  190 

Tanner,  Al,   70 
teaching  law,   24,  32-39 
Texaco,  Inc.,  86,  98-107,  127 
Traynor,  Roger,   33 

Uncle  Scott,   3,  4 

U.S.  District  Court  for  Northern  California,   108 

United  States  Navy,   46-59 

Vinson,  Carl,   75-77 

Wanvig,  James,   106 

Witkin,  Bernard,   40,  41 

women  lawyers,   154-158 

World  War  II  years,  46-59 

World  Affairs  Council,   183,  184,  191 


Carole  E.  Hicke 


B.A.,  University  of  Iowa;  economics. 

M.A. ,  San  Francisco  State  University;  U.S.  history  with  emphasis  on  the 
American  West;  thesis:   "James  Rolph,  Mayor  of  San  Francisco." 

Interviewer/editor/writer,  1978-1986,  for  business  histories,  specializing  in 
oral  history  techniques.   Independently  employed. 

Interviewer-editor,  Regional  Oral  History  Office,  1985  to  present,  special 
izing  in  California  legal  and  political  history. 

Editor  (1980-1985)  newsletters  of  two  professional  historical  associations: 
Western  Association  of  Women  Historians  and  Coordinating  Committee  for  Women 
in  the  Historical  Profession. 

Visiting  lecturer,  San  Francisco  State  University;  U.S.  history,  history  of 
California,  history  of  Hawaii,  oral  history. 


